SOA Can Deliver On Promise With Right Strategies In Place

For many insurance CIOs and IT executives, it isn't an accident that "hype" is a four-letter word. Past experience has taught them that the "next big thing" in insurance technology doesn't always live up to its promise.

So when the idea of SOA -- and all the hype that has come with it -- hit the mainstream several years ago, it wasn't a surprise that insurers were skeptical. Wasn't SOA just another buzzword, a new way to describe concepts that already existed? And how can you cost-justify investment in SOA, an inherently abstract idea, to the business?

Looking back now, though, evidence is starting to emerge that SOA has outlived the hype and, for some insurers, has delivered on its promise. Early adopters are seeing gains in flexibility, process reuse and speed to market. "The maturity levels of the organization are rising," says Cindy Maike, cofounder and strategic partner of Smallwood Maike & Associates, an Overland Park, Kan.-based insurance consulting practice. "We're starting to see some reuse of the services from an IT perspective. We're also seeing better governance around some of the initiatives."

"We've gone down these paths in the past, and there have been these flavors of the month, but I truly believe that there are a number of things that SOA provides that give you the ability to respond, whatever the context is at hand," adds Andy Edwardson, VP of information technology at McPherson, Kan.-based Farmers Alliance Mutual Insurance (FAMI; $145 million in annual written premium). "If you implement things correctly, you should be able to build a nimble environment."

As insurers continue to realize real business value from SOA, the concept of service-oriented architecture has changed from an abstract idea to a tangible, long-term strategy. "SOA is here for the long haul," Smallwood Maike & Associates' Maike suggests. "It's not like it's the latest fad. It's an architectural style that can really help us from an IT perspective as well as a business perspective."Perhaps with that sentiment in mind, fewer insurers are wondering whether SOA can deliver on its promise, but instead are examining what needs to be done from a workforce, cultural and governance standpoint to ensure that their SOA projects succeed. And they'd be well served to do so, contends Vivek Mehra, VP, global financial services and insurance, for San Ramon, Calif.-based global IT services firm Keane.

Mehra says that many insurers have been unable to realize the full benefits of SOA, particularly around reuse. "The reason for that is not technology, it's the governance around it," he explains. "Reuse typically requires a little bit of design overhead. You have to design for it."

"Typically, you still find a lot of rogue IT [developers] within different lines of business," Mehra continues. "So they have little incentive to work with somebody else in the organization to design a service that can be commonly used."Plug and Play

According to FAMI's Edwardson, the carrier plans to go live in early June with Bedford, Mass.-based Progress Software's Sonic ESB, an enterprise service bus, as the core of a large technology modernization effort. The goal of the enterprise service bus solution, Edwardson says, is to improve ease of use on future integration efforts with various new and existing applications.

"Historically, what we've recognized with our legacy systems is that, when we bring in a new product or a new application, trying to build that integration point has been doable but somewhat cumbersome," Edwardson explains. "Our hope is that -- around the whole Web services and SOA model -- as we move forward, we can [set up] integration points in a much easier fashion."

For Edwardson, that essentially is the promise of SOA. In a rapidly changing market, how FAMI processes its business today may need to be changed quickly tomorrow, he says, adding that SOA can deliver a certain amount of built-in agility to the carrier's IT organization. With SOA in place, changes can be made without having to tear down an entire business process and then build it back up again. "We're not forced to re-engineer our entire day," Edwardson relates.

Before embarking on the enterprise service bus implementation, FAMI dipped its toe in the SOA waters with a 2005 project that added endorsement processing to an already built-out Web application for personal auto new business submission, Edwardson notes. "We took that project and we said, 'Let's use this as a mentoring project,'" he recalls. "'Let's go out and find some resources and bring them in to try to help us understand the technologies that are at the core of SOA.'"

When that 2005 project quickly delivered business value, Edwardson says, the carrier decided to truly embrace an SOA vision. The enterprise service bus implementation, he expects, will help FAMI scale the SOA concept horizontally across a larger swath of the enterprise. "We thought what we could do was come along and use something like a services bus to not only leverage what we'd already done, but use it to plug into the vast number of applications we had across the enterprise, and use that to plug different integration points," Edwardson explains.

At a low level, according to Edwardson, the carrier has assembled workflows from a technical perspective. Essentially, he says, the company is developing more "plug-and-play" solutions, as opposed to hardwired applications.Unwiring the WorkforceOf course, as FAMI has moved away from that hardwired environment, its IT professionals have had to follow suit. Developing solutions and applications in an SOA environment can require a different type of mind-set, Edwardson points out.

He recalls hearing a Progress Software executive describe SOA as social-oriented architecture. "I think he's got a great concept there because a lot of business processes are very fixed processes. We do things the same [way] day in and day out because that's what the system dictates," Edwardson says. "We want to make sure that we maintain underwriting discipline and all these other things, but we don't want to just continue to do things the same old way because that's the way they've been done for the past 20 years."

At Chattanooga, Tenn.-based Unum ($52.4 billion in 2007 assets), enterprise architecture VP Richard Klausner found that change management was as important to the success of Simply Unum -- a new platform deeply rooted in SOA that the company has called one of the most significant product and service initiatives in its history -- as any technical change. "Equally significant [to the technology change] is the clear development, articulation and communication of a consistent architecture," Klausner says.

According to Klausner, Simply Unum was a large undertaking that represented major changes in technology and process at Unum, an employee benefits insurer. It allows the carrier to quote multiple products and create integrated proposals, while giving customers access to a single Web site and increased self-service capabilities. [For more on the Simply Unum initiative, see Unum president and CEO Tom Watjen's related article, page 35.]

"The level of integration and consistent architecture would have been impossible to achieve in [this] accelerated time frame without a service-oriented approach," Klausner says. "The enabling technologies for us that made this so highly effective were our ability to consistently orchestrate entity-based services through [Redmond, Wash.-based Microsoft's] BizTalk and our ability to build a highly flexible workflow where work steps called the business orchestrations through a fully automated workflow solution, [Palo Alto, Calif.-based Tibco's iProcess]," Klausner details, noting that the carrier decided against employing an enterprise service bus.The Culture of Change

As the phased rollout of Simply Unum has progressed (the first phase launched in August 2007), Klausner and other Unum execs have adopted a "focus on the change curve" as a key best practice, Klausner relates. "So many of our application teams were used to having control over all facets of production and their whole solution," he says. "Here, we had to start thinking of solutions in terms of consumers and providers."

In the past, Klausner adds, application teams could build entire Microsoft Visual Studio solutions and see and understand how all the pieces fit together. Now those teams have been designated as either consumers or providers of services. The level of collaboration and integration is now highly sophisticated, Klausner says. When Unum adopted the service-oriented approach, "They didn't see the whole solution [anymore]," Klausner explains, "and that was a challenge for people."

Often, teams are dealing with requests for a given service from several projects simultaneously, Klausner continues. That requires the development teams to normalize services across those large sets of requests in order to build operations that will satisfy multiple consumers. "That was a whole new level of skill and collaboration for our technical architects and a whole new [level of] project leadership accountability for our technical project leaders," Klausner details. "The kind of 'nexus of solution' that is required for a large SOA project brings in all kinds of changes like that."

To help along that culture change, Klausner says, Unum launched a two-pronged educational effort that focused first on the consistent adoption of iterative framework methodology and then on the SOA architecture itself, including design process and patterns. "We really had to push a high degree of education in those two major areas, as well as the business process itself," Klausner says.Over at FAMI, according to the carrier's Edwardson, the key workforce culture challenge has been around decision making: When is it beneficial to use an SOA strategy and when is it not?

"[There is] this buzz about SOA and XML and building Web services," Edwardson says. "We learned that you can get caught up in the hype and say, 'Everything I do from this point forward, any messaging that I do, I'm going to do in an XML format or use Web services or whatever the case may be.' We learned that there are implementations of those concepts that can be counterproductive."

Edwardson says FAMI still is not where it ultimately wants to be in terms of developing organizational controls to ensure that team members maintain a certain SOA discipline, but the carrier has started down that road with the establishment of application architect positions. Workers in the new role are tasked with taking a broad look at specific projects and deciding the pros and cons of newly developed processes, replaced applications and enhanced solutions, and how those initiatives relate to an SOA environment, Edwardson explains.

"You don't have to build this big, verbose XML message to accomplish a simple task," he stresses. "There is a time and a place to implement these technologies, and you have to evaluate where to best do that to fit your enterprise architecture."

Smallwood Maike & Associates' Maike says the skills required of someone in an application architecture position have become a hot commodity in the industry's job market. "It's starting to be called 'T-shaped skills,'" Maike says, "with the T shape being a grasp and understanding of the business and an understanding of technical [concepts]."It's not necessarily a brand-new skill set, Maike adds, but it is one that is in short supply. "It's the rebirth of those business architecture skills -- someone that understands business strategy, knows the business processes and has an appreciation for technology," she says. "There are not enough [people with those] skills ... in the industry."

While IT professionals would be well served to develop a strong business acumen, the SOA change curve extends beyond architects and development teams. "We've got to have people on the business side start thinking about what it means to be service-oriented," says Maike.

Business-Oriented SOA

Unum's Klausner agrees. Full business buy-in, he says, was integral to the success of Simply Unum. Business leaders don't necessarily understand all of the technical details, but as the project has progressed, Klausner relates, he has found that business leaders have become comfortable discussing SOA in terms of services and orchestrations. "The success of this effort was predicated primarily on the fact that it was fully business-driven -- a major strategic effort of the company with full buy-in from the business," Klausner says.

Trust was key in developing business/IT alignment on the project, Klausner adds. In fact, he asserts, it's doubtful that the vast Simply Unum project could have been delivered on time had the business not embraced the SOA approach suggested by IT."Taking an SOA approach was a critical success factor given the business direction and high-level requirements," Klausner explains. "Fortunately, we had a large trust factor with the business. We didn't have to spend an inordinate amount of time doing cost justification. We were able to really use that trust capital and go ahead and move forward [with the project]."

As important as business/IT alignment may be on SOA projects, Smallwood Maike & Associates' Maike believes carriers need to take things one step further if they hope to realize the full benefits of a service-oriented strategy. "We're saying that we're trying to align business and IT. I think what we really need to do is to have linkage between the business and IT," Maike explains. "If we can get [that], we'll start to see more of the transformation and agility that the business wants. It's linking SOA to 'How is that going to fulfill my business strategy?'"

Currently, SOA projects in insurance largely are led by the IT team, with the primary benefit being more agile IT operations. However, as more business/IT linkage occurs, perhaps the business will equip the IT team with the necessary perspective and direction to take full advantage of reuse across the enterprise -- resulting in full-scale business agility that transcends the IT operation, suggests Maike. "SOA is definitely a journey, and one of the things we need to see happen is, rather than using the term 'business-driven,' we need business to drive," she says. "There's a big disconnect between what it is to be business-driven versus actually being led by the business."

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