What is cut-over management? It is the preparation of the cut-over and its execution including all components from the storybook (or run book), resource planning, briefing meetings, execution of control and decision points and then, of course, reporting and traceability of the decisions which were taken. Beside that I believe cut-over management should also include the readiness assessment for conducting the final cut-over and therefore the switch to a new system and a new operating model. The readiness assessment should provide an answer on what the operational and reputational risk is once the cut-over is executed, if this risk is acceptable or, if it requires a postponement of the cut-over.
Therefore the “Readiness and Risk Assessment” should be an integrated part of the cut-over procedure to ensure overall success – and to avoid operational issues later.
When looking at the recent failures of core banking migrations, we must mention the failure of TSB in London in 2018. There are various articles covering lessons learned from this failure (https://www.locktoninternational.com/gb/articles/tsb-it-failure-lessons-learnt). One of the listed conclusions is that a “BIG BANG” should be avoided and migrations should be done incremental – to reduce risk and costs. From my perspective, this conclusion is incorrect. Incremental migrations are requiring intense testing and result in higher overall costs, as two core banking applications need to be maintained until all clients are migrated. While this might be a valid solution in a few instances, I wouldn’t generalize and say BIG BANGS are always too risky.
More importantly, I believe that the “GO” decision at TSB was taken on an incomplete readiness and risk assessment. Reviewing all the issues TSB had (listed in the media) because of the cut-over, I can hardly believe that there was a proper readiness assessment or a proper risk assessment before cut-over. The lack of these cut-over procedures lead, I believe, to the wrong conclusions regarding the readiness of the project (and the IT product) for a cut-over. I believe this was the real reason for failure – lack of proper readiness and risk assessment as preparation of the cut-over – reviewing the technical readiness (IT set-up and development), data readiness (data migration), operational readiness (IT and business), functional readiness (the IT platform) and cut-over readiness (the cut-over procedures)
Before any cut-over, the key stakeholders must question if the project is ready, if the cut-over can be performed and if the associated operational risks are acceptable. To answer this question Cut-Over Readiness Criteria need to be defined and then regularly assessed and, based on the assessment status, a final decision to either conduct or delay the cut-over can be taken.
The Cut-Over Readiness Assessment (incl. the criteria, process and the assessors) must be well prepared, agreed and signed-off by the client key stakeholders as soon as possible, at the latest 6 months before the Cut-Over as part of the Dress Rehearsal preparation. At ON-POINT, we have developed a standard set of readiness criteria and processes to be evaluated as part of the cut-over procedures to avoid what happened to TSB – and to enable the stakeholders to take the right decision.
In short, I believe that a thorough Readiness Assessment and Risk Management is key for every successful cut-over. It enables everyone involved to avoid risks or at least to actively manage them. This is also very valid for the cut-over itself, which by its very definition involves many risks. The challenge for every cut-over manager is to understand and evaluate the different risks and the different risk types at hand and then to either accept and manage them or to take actions if stakes are too high.
