Legacy systems transformation, SOA and outsourcing were just a few of the major IT challenges discussed in a session titled “Technology Evolution and Revolution: IT in Changing Times–A CIO Panel,” as part of the 2006 ACORD LOMA Systems Forum held here May 22-24.

Panel moderator Greg Maciag, president and CEO of Pearl River, N.Y.-based ACORD, asked session participants to address the primary challenges to CIOs in today’s insurance organizations.

According to panelist John Kellington, senior vice president and chief technology officer for Ohio Casualty Group, based in Fairfield, Ohio, legacy transformation is a process that will be aided by the recent advent (in insurance companies) of service-oriented architecture (SOA). (SOA, generally, is a web-enabled information processing strategy that allows re-use and sharing of different services and processes across platforms and information silos.)

“If you have the appropriate architecture, a lot of things get a lot easier,” said Kellington, “but it’s important to get our arms around what we mean by SOA.”

“Architecture enables business processes,” said panelist Barbara Koster, chief information officer for Newark, N.J.-based Prudential Financial. “This is the first time we can articulate well to our business partners what it is we do.”

Another panelist, William N. Pieroni, global chief information officer for Chicago-based Aon Corporation, pointed to the “ambiguity” around terms such as SOA and web services. “This is ultimately formalized common sense,” he said of SOA. “Let’s just embrace it.”

He added, however, that he did not favor a common definition of SOA, noting such a definition would be “ultimately meaningless.”

The panel also discussed how insurers can better manage their data. “The world now is micro-rating and predictive modeling,” said Kellington. “Getting there comes down to data. It takes a lot of communication; a common data dictionary helps.”

According to Koster, the ability to “make low-level data into information that the business can use to create products is critical.” Panelist Ann Purr, second vice president, Information Systems, for Atlanta-based LOMA, noted, however, that businesses may have difficulty deciding where to spend IT money. “The IT community becomes an advisor,” she said.

Next, panelists addressed business and IT alignment within insurance companies and the “chasm” generally acknowledged to exist between the two entities. “Two-thirds of IT projects in insurance fail to deliver on their objectives, perhaps due to unrealistic expectations,” said Pieroni.

Why is there a chasm? Pieroni pointed to the historic view of IT as “a glass house, separate, put away,” while business people who hand them projects are “hoping and praying for results.” And, while business personnel in insurance have learned more about information processing, he said they remain “a bit sophomoric.” He did allow, however, the industry is “on the path to self-discovery.”

“It has to do with education, as well– being transparent and helping [business people] to understand IT,” said Koster. She added partnership around a company’s business strategy is a key to the relationship–which she compared to a marriage.

“It is a marriage,” Kellington agreed, noting the chasm label does not apply to his organization. “Most CIOs are members of the executive management team,” he pointed out. “We all talk. It’s something you work on.”

On another topic, Pieroni warned that “a huge resource issue is coming.” He pointed to a sizable population of IT professionals in the industry who have been around for up to 30 years and are nearing retirement age.

“When you look at the statistics for the industry, the generation of workers behind this generation is not as large–and not ready to go into technology,” he observed. “As an industry, we have a problem. How do we get kids interested in math and science again?”

He pointed to the idea the college-bound youth today are being told (incorrectly) that “everything is going offshore,” thus, they are not opting for careers in computer science.

Kellington noted that young job seekers in IT are searching for competitive pay and the opportunity “to work on cool projects.” There needs to be “a nurturing environment” in the insurance industry for such individuals, he said. “We don’t do enough to promote it.”

Koster raised the idea that young workers “want to work more remotely and raise families. They will drive us into creating the programs that will allow them to work that way.”