Leading insurers will continue to be big consumers of enterprise integration as they strive to tie together legacy systems and a plethora of custom and packaged applications that span multiple platforms and languages.
Theres also the need to work through mergers and acquisitions–not to mention the goal of leveraging technology to improve the bottom line through initiatives such as customer relationship management.
It has become hard to talk about enterprise integration without mentioning Web services. But very few enterprises plan to move forward until more is known. However, there are good reasons why companies should not sit on the sidelines until the technology proves itself. For one, major vendors are investing heavily in the technology to drive the adoption of Web Services. More importantly, insurers who position themselves to move quickly when the time is right will have a strategic advantage over those who wait it out.
What follows is an introduction to Web services, as well as some prudent steps insurance IT leaders can take to prepare their organizations for emerging technology that will become a standard weapon in the effort to improve business speed, efficiency and financial performance.
Web services are self-contained units of business logic and data that can be assembled into applications. These loosely coupled software components are delivered over Internet-standard technologies, which makes them universally available.
Web Services are the cornerstone of a service-oriented architecture (SOA). SOAs allow developers to assemble systems from Web services published by internal or external providers, eliminating the need to build new applications from scratch. Services are accessed via standard protocols that are language-, platform-, and location-independent and managed through a central registry. This provides a streamlined way of integrating existing systems and adding new functionality.
Easier and faster integration, in turn, improves profitability. Insurers can use it to more quickly adapt to changes and seize growth opportunities.
SOAs are different from traditional enterprise application integration (EAI) solutions. EAI involves translating data from the format of one application into the format of another incompatible system. Most EAI solutions implement message-based architectures that rely on proprietary protocols and adapters in order to do this. Most also provide business process management tools, which are just emerging in the world of Web services.
Web services have gained a lot of attention, primarily because the underlying technologies are based on industry-standard protocols like XML and HTTP. As such, the technology promises to address interoperability requirements that prevented similar concepts from firmly taking hold years ago. Standardization also allows for cross-vendor compatibility and provides a forum for open-market tools and products.
Apprehension over Web services persists, however, because the debate continues over which standards will prevail. Critical standards for infrastructure services, such as data integrity and systems management, are also yet to be defined. In addition, theres concern over how long it will take for standards to mature and which will fit the bill when they do.
Regardless of these factors, however, the tremendous vendor support for the technology cannot be ignored. The fact that a number of prominent vendors are fully committed to Web services speaks volumes about its staying power. Vendors large and small have also introduced tools and architectures that make developing, deploying, and managing Web services-based solutions easier. Additionally, multiple vendors have already filled some standardization gaps.
The best way to get a handle on how the technology can deliver tangible business value is through a proof of concept (POC). This also allows carriers to get a jump on the competition with minimal risk. Here are some things that will help companies deploy successful Web services POCs:
Get focused: Tie the POC to an actual business problem. IT leaders need to focus on a host of issues, such as how a SOA will be managed, where Web services fit with existing and planned technology, and process evaluation. Together, IT and business leaders should build a solution that supports both IT and business requirements.