SOA: Heralding a New Era of Empowerment for CIOs

Author: Piyush Singh
Senior Vice President and CIO, Great American Insurance Company
Service Oriented Architectures (SOA) is heralding another era of empowerment for the CIOs to more effectively connect, reuse, monitor, and manage their organization’s business services. Initially there was a lot of confusion in the marketplace about what SOA is and what it can do. Also the technology was far from being a proven concept and the companies that have had the most success with it till that date were those that stayed on the leading-edge and needed the advantages offered by SOA to provide customer based business solutions. But today many are realizing the advantage of adopting an SOA and moving the application development paradigm from programming to business process assembly, even though it requires a significant architecture and mind-set shift for most companies.

Especially for the insurance business organizations like us, the ability to respond quickly and cost effectively to new market opportunities (especially these days of market turmoil !) is very important. Certainly, an SOA implementation will allow us to be more competitive through effectiveness at various levels – operationally by making the various parts of the business process an integrated whole and strategically by allowing us to build new solutions as well as replace componenets in a shorter time-frame . Though lots of BFSI companies have moved into SOA, as real time transactions and responsiveness are truly critical for them to stay competitive in the business, the companies who sell comparatively less time sensitive products such as insurance are slower in adopting SOA.

At GAIC, we have embarked on an SOA, which is truly an end-to-end SOA. What I mean by saying 'end-to-end' can be illustrated by this example. Today in our system, data entered once needs to flow through the enterprise without human intervention. We have achieved this at the backend, and are working diligently in establishing this for all front-end facing systems too. This is resulting in enhanced data quality, elimination of redundant data entry, and significantly higher employee effectiveness.

Previously, for an agent to get a quote, in specific situations, it would take about 24 hours. The world we are working towards is different. Once an agent submits a request for a policy, the application will offer a simple front-end to the underwriter to perform a variety of facilities like entering and clearing the submission, entering data for underwriting and rating perspective, rating and then quoting via e-mail or fax. The process of receving and responding to the submission can now be executed within a very short time window. Once the agent accepts the quote, the same data moves on through the process leading to policy issuance. immediately.

However, SOA demands a bigger investment and a longer strategic commitment than the CIOs may think. The tactical part of service-oriented development is a climbable technical challenge as people write a suite of commonly used services. But the strategic part of creating an architecture based on business components glued together and orchestrated through common interfaces and transformations requires the CIOs to make a compelling case for enterprise architecture,. Understanding those processes and getting buy-in on enterprise sharing are the real prerequisites of SOA-based business transformation.

For companies where technology is not a part of the business or where there is operational and not strategic thinking , SOA is definitely not for them. Hence, the CIOs need to pursue an SOA strategy carefully as the service development and architecture-planning pieces of SOA are distinct but not independent; as they need to be considered and executed simultaneously. Services built in seclusion, without taking into account the business goals of the company supported by technology as a transformation tool, may have limited potential for reuse or may fail outright. One has to keep in mind that grand architectural planning exercises can drag on endlessly, without providing any real business benefit, if the end-goal is not understood and implementations are tactical and not strategic.
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Posted by: tata tatababy os - Friday 30th, October 2009
3: Hi Sir,
I agree with your thoughts but as a underwriter, i have faced several system related issues | sometimes these things makes the process a bit more complicated. though,data management becomes quite easy with these tech development but cost factor still plays a crucial role in indian insurance industry .
Posted by: akhilendra pratap singh - Tuesday 30th, December 2008
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