How to get the best out of external consultants working on IFRS17 compliance programmes

How to get the best out of external consultants working on IFRS17 compliance programmes

March 1st, 2019

One key area of discussion at the IFRS 17 London event I attended recently concerned the challenges programme leaders face managing external consultants alongside internal IFRS 17 project teams.

Management consultants play an important role in today’s business environment and bring important much needed skills that to ensure overall programme success. The recent trend of insurers moving towards leaner business models means that when regulatory change programs such as IFRS 17 arise, internal resources can become severely stretched. When this is combined with a lack of knowledge concerning IFRS 17 one option is to seek specialist external support.

For project managers, the participation of external consultants within a team can deliver significant benefits but can also cause problems. External consultants provide valuable skills and methodologies that reduce risk, increase speed of delivery and provide innovative solutions to new problems. However, in reality their expected talents do not always meet expectations. Project managers may find consultants hard to manage and the extra cost can have a huge impact on already stretched budgets.

IFRS 17 programmes require certain steps to be taken to maximise the benefits of using external consultants.

Establish a balanced relationship

External consultants require a different management approach compared with internal consultants or full-time team members and it is important to achieve the right balance. Consultants should be carefully managed, although exerting excessive control can strain relationships and adversely affect productivity.

Permanent employees are normally aware of reporting lines and staff seniority but this is not necessarily the case with consultants. You may assume consultants regard you as the “client” and will automatically follow your instructions however in reality, being a client employee is not necessarily the same as being the client and consultants may have differing views of who the client actually is.

Who the client is will depend on multiple factors, but usually the individual responsible for engaging the consultant is considered the client. This is not however always the project manager. Regardless of this, consultants will want to meet the needs of the project manager but will probably regard them as one stakeholder amongst many. Project managers may work with team members who do not regard them as their line manager. However typically they will have skills to enable them to influence people to perform tasks that they might not necessarily have line authority for.

It is important to build trust within the team. It can be challenging to integrate consultants into an existing team, especially if they are being introduced to solve problems that internal team members are unable to deal with on their own. Internal consultants and employees may be concerned about their jobs and reputations which may lead to tension. It is therefore important to communicate to internal staff that the need to engage consultants does not reflect adversely on them. Honesty is the best policy in explaining what the consultant is being brought in to deliver and the lessons that the internal team can learn from the project.

Ensure the consultant knows why they have been engaged

It is essential to clarify the consultants’ role and identify the key deliverables. Make sure everyone involved with the project understands why consultants have been engaged, including the consultants themselves. Ensure they are conscious of any underlying issues that might not have been openly discussed.

If consultants are employed by a third party consultancy firm then they not only have to satisfy client stake holders but also management of the consulting firm. The consulting firm will need to ensure the work performed is of the required quality to avoid the risk that the client will reject it and require remediation which could be non-chargeable. Satisfying internal stakeholders will have a direct impact upon client project delivery; however, a consultant’s career depends on their relationship with their consultancy and not with the end client. It’s worth considering that when a consultant seems reluctant to follow directions it may be because it conflicts with working practices and methodology of their consultancy.

Get consultants productive rapidly

It is important to ensure consultants are productive as soon as possible. Consultants should be able to start producing quickly, however, whilst they may not need as much on-boarding as new employees, they will still require support in getting acquainted with the organisation, the team they’ll be working with and with the details of the IFRS 17 project they will be working on.

What motivates consultants?

Accomplished consultants have four primary motivations. They wish to meet client needs, generate revenue for their consultancy, enhance their personal reputation and create the conditions for further business activity on account of their delivery record.

When a consultant has been engaged on a client site for some time then they may regard themselves as being a member of the client team. It may be assumed that their interests and the clients are the same. Whilst consultants are normally motivated by meeting client needs they are not necessarily there purely for the client’s benefit.

Managing consultants

Managing consultants as part of a project team should be the same as for internal team members. They should be set tasks which they will need to deliver on time and to the required quality. Consultant activity may change as projects progress. The best approach is to communicate regularly with consultants to continually discuss deliverables and expected outcomes.

Consultants need measurable goals, so should be to set SMART (Specific, Measurable, Attainable, Relevant and Timely) targets. These not only clarify expectations, but also allow measurement of progress and performance.

Feedback and monitoring

It is important to provide regular feedback. Consultants need feedback on their performance so they know what they’re doing well and where they should improve. If a consultant is engaged via a consulting firm then it is important to also provide them with feedback. It’s important that the consultancy firm is delivering on the promises they made and they will rely on regular feedback to ensure the statement of work is completed as agreed.

There are significant benefits to be gained by employing an external consultancy as long as they are correctly managed. It provides a simple, fast way to gain access to scarce expertise which in the case of IFRS17 is very much the case. Consultants should have the required skill set and be able to provide instant assistance to clients. They will be focused on project delivery and achieving results in a timely manner.

Millennium Consulting is an established (1995) Finance Technology consulting and resourcing company with almost 25 years experience assigning highly experienced individuals and teams to support insurers with regulatory change programs such as Solvency II, IFRS9 and IFRS 17.

We provide cost-effective, high quality interim support for niche insurance focused finance technologies such as Prophet, MoSes, Aptitude Software, Legerity Software, Tagetik & SAS. We also have extensive experience delivering change in respect of ERP and finance technologies such as SAP, Oracle, PeopleSoft, SunSystems and Unit4 Financials (previously Coda).

To find out how we can provide support with your IFRS17 compliance program contact Brendan Shaw, at

The IFRS 17 challenge (and opportunity) ahead for insurers

The IFRS 17 challenge (and opportunity) ahead for insurers

January 1st, 2019

From 1st January, 2021, insurance companies will have to apply a new accounting standard, known as International Financial Reporting Standard 17 (IFRS 17), which will change the way revenue and profits are recognised for insurance contracts. IFRS 17 represents the most significant change to insurance accounting requirements in 20 years. Where previously each regional market disclosed financial reporting figures in their own way, from 2021 regulators will be able to compare the outputs of an insurance company in UK, with any other insurer in the world. The harmonised system demands a complete overhaul of insurers’ financial statements and will come at a cost to insurance companies. This will be a complex compliance project to the deadline date.

It’s an impactful change for insurers affecting many areas from actuarial models, accounting systems, product design and financial statements to taxation and operations. These fundamental changes, especially to their system will be both time-consuming and costly.

While the implementation date of 1st January 2021 may seem a long way off, the journey to IFRS 17 compliance will be time consuming and organisation need to act now if they haven’t done so yet.

The regulation represents a systemic change in the valuation of insurance contracts and will require a significant overhaul of financial and actuarial systems, processes, accounting and disclosure policies. IFRS17 compliance has quickly become a high business priority. The ripple effects of which will be felt throughout the finance value chain: from finance calculations to accounting, costing, planning, forecasting and reporting.

In a nutshell, IFRS 17 requires the revenue and profit earned from an insurance contract be recognised over the period the insurer provides coverage. Insurers do so by amortising unearned profits on a straight-line basis over the lifetime of a contract. The general effect of IFRS 17 is that it spreads the revenue as well as the profit over the lifespan of a contract as opposed to the current practice of taking most of the profit on Day 1.

Phil Keet, Managing Director at Millennium Consulting states, “The impact of this is that it raises certain challenges for insurance companies. It will have an impact on their profit statement, especially in the first year of implementation. The underlying economics don’t change, the risk is the same and the premium is the same, and it should generate the same profit over the duration of the contract. However, senior management and investors prefer to recognise profit now rather than spread over a 20 or 30 year period”.

97% of senior UK insurance professionals believe business is going to become more complex and costlier to operate in as a result of the regulation, and 90% believe that the cost of compliance will be more than the Solvency II Directive, according to research from data firm SAS.

Given the large scale and complexity involved, the time period to implement the necessary changes is tight. Finance and actuary functions will need to collaborate and work together closer than ever before to map their journey to compliance and assess the architecture gaps within the IT infrastructure. Most businesses do not have the computational ability to cope with the complex calculations.

The cost of compliance with IFRS 17 is significant, resulting in smaller companies potentially struggling. The top 10 global life insurance companies, combined, are expected to spend in excess of US$2 billion on this new standard. Half the compliance cost is expected to comprise in investment in systems.

To deliver on IFRS17, insurers will have to generate and process much higher volumes of data. There will need to be a complete shift in the way that information is collected, stored and analysed. Finance, actuarial and risk management IT architectures used within insurance companies are often siloed and rely on legacy tools that are not flexible enough to handle the detailed requirements of IFRS17. The temptation is to attempt to patch up the existing separate solutions, which may seem like a simple and cost-effective answer but one which will more than likely prove incredibly costly and risky. The siloes make for very manually intensive and error prone data management, trying to trace the reported figures back to the calculation models and assumptions that produced them.

“IFRS 17 compliance will be difficult to achieve by simply adapting legacy systems. Due to the complexity of the regulatory requirements and the large amount of good quality data that is needed, pursuing minimum compliance at minimal cost will leave insurers highly exposed” says Phil Keet.

IFRS17 also requires businesses to look and plan to the future. It introduces the concept of a forward-looking view on the finance data. Cash-flow modelling and forecasting and the ability to simulate the impact of a new product or a change in pricing on the IFRS17 financial statements are becoming key functionality requirements for technology under the new regulation. Trying to achieve this with legacy systems would be nearly impossible.

2021 seems like a long way off but in reality companies only have until the end of 2019 to design, build, test and implement all their system changes, as the transition adjustment and opening balance must be calculated effective of 1st January 2020, in order to derive the first-year comparatives.

Complying with this new regulation will force insurers to collate and store a huge amount of data from multiple source systems. A benefit of this bi-product of compliance will be a hugely valuable resource which insurers can use to give a clearer view of their insurance contracts’ performance. Combining data on a single platform for planning and forecasting, will eliminate silos across the organisation and ease data reconciliations, allowing more accurate results which the business can have confidence in. It will also enhance the comparability of the financial reporting and help insurers benchmark themselves against competitors.

Insurance companies need to look at a unified data platform to support the large volume of data required to achieve the regulatory requirements. The current reliance on heavily, manual processes and legacy systems has to change. Insurers need to look towards collaborative and open platform solutions that can mine and orchestrate the data from across the business, support the implementation of the core reporting requirements and be agile enough to respond to scenario modelling and the what-if analyses required during the transition period.

Starting implementation programmes early can help insurers seize new IFRS 17 market opportunities. I will be a time consuming and costly journey but will ultimately be one worth taking.

Finance Transformation Specialists Since 1995

Finance Transformation Specialists Since 1995

January 1st, 2019

Millennium Consulting has been supporting customers deploy and optimise accounting software since the mid 1990’s. This has included selection, architecture, build, deployment, re-engineering and upgrade.

Accounting software selection is the first step of a process to successfully deploy a customised solution. Partnering with a quality-assured change consultancy that provides skilled, delivery-focussed teams is an essential requirement needed to achieve project success. We help clients introduce innovative working practices that help them grow, streamline cost and mitigate risk thereby enabling them to achieve long-term success.

Operating worldwide, Millennium Consulting assembles teams of experienced Change Specialists including Programme Directors, Solutions Architects, Programme Managers, Project Managers, Team Leads, Business Analysts, Functional Consultants and Technical Consultants to deploy, upgrade, re-engineer and develop the latest accounting software applications.

Successful project delivery requires people with proven technical ability, commercial aptitude, advanced inter-personal skills and a track record of success. Our selection process is thorough and demanding as our reputation is vested in the calibre of consultant that represents us which leaves no margin for error.

Our customers expect the best accounting specialists available and we make it our responsibility to ensure their needs are met.

London to Hythe Expedition Successfully Navigated

London to Hythe Expedition Successfully Navigated

October 28th, 2017

On Saturday, 28th October 2017, an energetic group of Millennium Consulting employees and associates completed a gruelling 80 mile bike ride from Trafalgar Square, London to the south Kent coast, in support of Vision Africa.

Setting off from Nelson’s Column, where Horatio Nelson is honoured for his remarkable victories, they too sought to navigate their way through the beautiful Kent countryside to the high seas of Hythe. Having luckily avoided Storm Brian which struck the UK the previous weekend, conditions were sunny but chilly for the 8:30 early morning start. It was idyllic cycling weather.

After the obligatory pre-journey team photo (above), the group set off on the trickiest part of the ride, navigating a route out of Central London. Jon Durrant and Andy Ostle made a quick getaway although unfortunately for them, it was in the wrong direction which added an additional 5 miles to their journey. The other riders peeled off into smaller groups and headed south towards the first checkpoint at Sevenoaks, around 28 miles from the start.

The promise of coffee and cake was enough to power everyone through the most undulating part of the ride and the busy “A” roads. For Dave Callanan, Duncan Howitt and Sara Carter it included a close encounter with the M25 which was not part of the original route plan. When the ‘Easy Riders’ arrived at Sevenoaks, they were met by the support team car laden with welcome ‘goody bags’ containing much needed drinks and chocolate. There was, however, no sign of the ‘F1’ riders, who were long since gone. The leisurely break also provided Duncan Howitt with the opportunity to acquire an additional passenger, who was happy to help him navigate from his lofty position perched on his shoulders (see picture below).

Having split up into smaller groups once again for the next leg, a variety of routes were taken which in some cases added even more miles. However everyone arrived eventually at the second stop in Staplehurst. After resuming the planned route, Jon Durrant and Andy Ostle were joined by Ross Richardson in Staplehurst, however, their rapid journey meant they arrived before the support team and unfortunately missed the refreshments available for the later group. The three of them continued regardless through the final 30 miles, arriving in Hythe at 2.15 p.m. an impressive five and a half hours. Brendan Shaw who was forced to ride without directions and a flat phone battery was next to arrive at around 2.45 p.m.

Next up was Rupert ‘The Lone Ranger’ Aspey who having lost the main group on the outskirts of London, made great progress on his own and with limited local knowledge, no map or directions and only his phone for company crossed the finishing line at 3:15 p.m.

The “Easy Riders” remained together most of the way through the last leg, only splitting up 10 miles from home. They all arrived at the finishing line around 5.00 p.m. with aching legs and a raging thirst. A cold beer never tasted quite so good!

A great time was had by all and most importantly over £1,000 was raised for Vision Africa. Thank you to the participants, Andy Ostle, Brendan Shaw, Dave Callanan, Duncan Howitt, John Hemphrey, Jon Durrant, Jon Shillibeer, Louise Hemphrey, Morag Hards, Phil Hards, Phil Keet, Ross Richardson, Rupert Aspey, Sara Carter and Steve Pierce. For anyone still able to contribute to this cause there’s still time to donate by visiting