Web Services: The Next Big Thing?

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Could Web services be the “Next Big Thing?” Theoretically, Web services will make software programs easier to write. They will simplify the connections between programs, and more easily connect internal and external entities and applications. As a result, many experts seem to think Web services will provide solutions to some of the insurance industrys biggest challenges, including the need to facilitate constant IT changes and the demand for increased connectivity, efficiency and interoperability.

The term “Web services,” however, is a little misleading, as it refers to both the development tools used to build easily integrated Web-based applications, and the underlying technology protocols and standards required to run and support these applications over the Internet. “Web services” also refers to the resulting component applications that run on the Web. These self-contained modules can describe themselves (their functions and services) to one another and automatically link together without the traditional challenges involved in system integration.

However, running and connecting applications over the Internet is obviously not new, so how are Web services built to be a “better” mousetrap? And how can organizations avoid being financial casualties of misguided Web services projects?

Web services already have begun to creep into many organizations. IT departments already have begun working on Web services projects or have plans to begin. These organizations recognize the many benefits of jumping on the Web services bandwagon.

What should excite insurance organizations is how easy new applications will be to build, modify and integrate using Web services. IT departments will be able to snap together modular components or services like Lego blocks, allowing developers to build complex applications on the fly. At one time, it would have taken a large number of IT professionals, working a number of years to build an enterprise application. Today, Web services conceivably can cut this work down to weeks. The modular and shareable nature of Web services enables organizations to enhance the functionality of applications easily, leverage investments in legacy systems and make additional system improvements.

Web services also will do away with the whole compatibility problem, as these services are interoperable, meaning they will work with other programs without special integration efforts. Interoperability is critical, especially as the “browser revolution” and “Internet as computer” concepts become realities. By adhering to established protocols and standards, Web services by their very design improve interoperability between diverse development platforms, such as J2EE and .NET. The fundamental goal of interoperability is to eliminate the boundaries between various platforms and development environments. Developers wont have to worry about what language or operating system Web services are hosted on. Instead, interoperability allows them to all work together.

In addition, Web services provide several layers of cost efficiency. First, IT development and improvement initiatives will be more cost-effective. The addition of Web services allows for increased efficiency and streamlined workflow, significantly reducing administrative costs. With increased connectivity, insurance professionals have access to the information they need to improve decision-making at vital points of the insurance process, including underwriting, claims management, investigation, litigation and settlement. All these factors allow organizations to control their costs at multiple junctures.

Claims management and risk management involves the collaboration of many different parties, processes and technologies. In todays high-tech world, collaboration and connectivity are two sides of the same coin, and Web services help achieve both. Web services provide a means for disparate systems to talk to each other, facilitating seamless transfer of information. Traditional methods of connecting point solutions via an interface can be cumbersome and time-consuming. Web services simplify these connections, acting as an inherent collaboration tool that vastly improves communication and compatibility of applications, while also enhancing cooperation between various entities.