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SOA: IT Fountain of Youth?

February 2007

How can SOA help carriers? That's what Insurance Networking News asked Andy Labrot, chief technology officer for the Innovation Group, Hartford, Conn. Labrot has 20 years of IT experience and leads his company's R&D efforts.

INN: As carriers grapple with aging technology infrastructure, how does service-oriented architecture (SOA) address their needs and challenges?

AL: The business of insurance has changed dramatically. Carriers are being pushed—by economics and by customers—to explore new business models and delivery channels. They no longer question that systems need updating. Instead, they focus on how to make the needed changes at a reasonable cost and with minimal disruption.

An increasing number of business and IT executives are discovering that SOA can provide a roadmap for an affordable, evolutionary transformation. SOA allows for incremental replacement, migration, retirement and consolidation of outdated systems onto more flexible, open and cost-effective platforms. SOA allows carriers to introduce technologies that process business requirements-while extracting full value from existing assets.

INN: While some vendors advocate a "rip and replace" strategy, you say SOA allows carriers to leverage what they already have. Why is that important?

AL: A critical factor for success in any technology-enabled organization is the effective use of existing assets. Carriers invest millions of dollars in systems and, naturally, they want to realize the full value. In many cases, the systems still handle core functions but lack the adaptability carriers need to respond quickly to changing markets.

While replacement seems inevitable, most carriers cannot afford to pay the price or suffer the disruption of a wholesale systems replacement. For them, SOA can provide a practical strategy with incremental payouts.

SOA acts as an enabler to the technologies, business processes and systems already in place. It acknowledges the capabilities of a legacy system and embraces the principles of modern technology-including "decoupling" to leverage those assets.

With SOA, carriers can extend the life and value of IT investments, while taking advantage of new technologies to meet immediate needs. More important, SOA paves the way for system consolidation and saves money by using consistent business processes and common functionality across the organization.

INN: Does decoupling break down platform and system dependencies?

AL: It's important to recognize that in a legacy environment the problem isn't always that a particular capability doesn't exist. Often, the capability is there but its use is limited to a specific system, and other systems can't use it. Because of the way the systems were designed, presentation logic is often intertwined with data access logic. Business rules are locked within individual systems and are hard to access.

At a high level, with SOA, business rules are divorced from the back end, breaking down the platform and system dependencies that inhibit applications from sharing and reusing functionality. As interdependence is reduced, the need for duplication is eliminated. The result is a technology-independent, collaborative, flexible and efficient computing environment where old and new systems work together to meet a carrier's evolving business requirements.

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