A large South African bancassurer had selected a software provider as the supplier for their IFRS 17 solution. A number of the provider’s components were already embedded as the modelling engine for their life insurance business and their IFRS 17 solution seemed to be the best fit in terms of addressing the data and storage requirements of the new accounting standard.
The initial quote for implementation of the software – excluding ongoing fees – came in at R40 million, and the bank approached MBE for advice on how to reduce the outlay while still achieving the desired outcome of a complete and efficient IFRS 17 solution.
Based on a combination of MBE’s knowledge of the business, more affordable day rates and experience in similar projects, MBE was able to reduce the total estimated spend to R7 million.
Reduce the estimated spend for an IFRS 17 solution while ensuring that it would still be complete, efficient and suited to the business.
How we did it
Having received the initial quote of R40 million from the software provider, the bank approached MBE for advice. MBE suggested some questions to pose to the vendor around what precisely would be included in the solution and how they arrived at their numbers. These questions, together with negotiation by the bank, led to the issuance of a more bespoke quote of R19-22million.
This was an implementation estimate over and above what they were already paying for use of the provider’s software components and excluding the ongoing annual maintenance fees that would also need to be considered.
The bank then engaged MBE in a series of workshops to delve deeper into their specific requirements and the details of the quote, to untangle tasks which could possibly be completed by MBE rather than the vendor, and to provide recommendations on what the essential and non-essential elements of the quote were.
MBE has been working with the bank for several years, and because of this partnership, MBE had an in-depth knowledge of the bank’s insurance business and requirements. The software provider also participated in these workshops, and a combination of the expertise of the three entities involved ensured that any decisions taken would be based on complete and informed input.
Following these workshops, MBE produced a report, which recommended that MBE and the vendor work together to implement the best solution to the bank, at the best value. With MBE providing the bulk of the service, and the software provider retaining tasks such as setup and training, MBE was able to reduce the total quote to R7million.