Everyone knows that aside from the underwriting department, information technology is one of the last places an insurance company should take unnecessary risk, and right now, open source technologies are feeling the pinch of skepticism brought on by a dearth of facts about how such systems work, the real risk involved and the benefits to implementation.

The reality is, you may never see mainstream advertising for open source products, but they are often more reliable than better known name brands and more widely used than many realize.

In many IT circles, the stigma around open source maintains it is reserved for the ultimate propeller heads or garage development projects. However, once you look at the facts, it is easy to see the value of using open source components not simply for cost savings–since many are offered free or at a very low cost–but also for speed-to-market advantages.

The discomfort inherent in open source software implementations comes from fear of the unknown. For insurance IT departments, this fear typically takes one of two forms. The first is caused by technical staff who may be displaced by an open source alternative about which they have little knowledge or experience.

The second stems from an uneasy management team that fears open source projects may run a higher risk of failure. This is why in order to begin to embrace open source, the first step is education.

Just what is open source? Basically, it is a program in which the source code is available to the general public for use and/or modification from its original design, free of charge. Open source code is typically created as a collaborative effort in which programmers improve upon the code and share the changes within the community.

If you dig through the archives of many “geek publications,” you will find endless articles about successful implementations of open source technologies.

Indeed, if you have ever searched for anything on Yahoo!, looked up a movie on IMDB, or submitted information to the U.S. Department of Labor, you have benefitted from the proliferation of open source software components in use all over the world today. All of these organizations utilize an open source database called “PostgreSQL” as the backbone to their infrastructure.

Just like commercial software products, the open source variety come in many shapes and sizes–and even more importantly, there is a spectrum along which the maturity levels of these products can be plotted.

A quick search on SourceForge, a popular online destination for open source developers, revealed more than 230,000 active open source projects available for download. These projects run the gamut from extremely mature products underpinning super-sized IT empires, to very early stage beta products created by a lowly developer in their college dorm room.

The typical gauge of product maturity level really does not apply in the open source world since there are no sales reps to talk to, no company headquarters to visit, and no glossy brochures to pass along to the CEO. In-depth due diligence by an architect is typically required to delve into the technical maturity of any open source product, and often this includes a proof of concept.

In spite of the fact most open source products are available at little or no cost, license agreements still govern use, redistribution, modification and warranties.

Frequently, these are not your run-of-the-mill license agreements. It's true, some are simply a single paragraph outlining copyrights, but others contain convoluted clauses, such as requirements to notify the licensor as to the nature of use.

It is important to note that these agreements may have an impact on how or where you can implement the open source product in question, so make certain all such license agreements are reviewed by legal prior to undertaking an implementation.

The acquisition of open source software–or any software for that matter–is an exercise in risk management. Just as the credit-worthiness of a potential commercial software vendor could be of concern to a potential purchaser, a similar or additional level of care should be exercised in probing into the risk involved when selecting an open source software product.

Key areas of consideration to take into account when selecting an open source product include:

o The reputation of the software within the user community.

o Ongoing research and development efforts.

o Standards and interoperability of the software.

o The software documentation available.

In an open source-friendly IT shop, strict governance–including standards, design, procurement and change management–are essential to ensuring adequate control is maintained over the implementation.

In an environment where the technical team is not constrained by a cost-benefit analysis exercise which justifies licensing costs, the potential exists for the infrastructure to become a programming “Wild, Wild West.”

This could result in unknown licensing risks or the implementation of a component which causes instability in the IT infrastructure. Both of these scenarios can be easily mitigated by a proper due diligence and governance process.

Bottom line, in tough economic times and a competitive IT landscape, open source can provide not only financial benefits but also speed-to-market advantages.

CIOs looking to take advantage of open source, however, may be required to step outside of their comfort zone. But if they are ready and willing to change the IT governance structure to support it, the unknown of open source can have significant benefits.

David Hanley is the vice president of business development for Toronto, Ontario-based Insurance Systems Inc., provider of WebWriter Enterprise, a fully integrated policy administration suite which is 100 percent deployable on an open source infrastructure. He may be reached via e-mail at dhanley@insurancesystems.ca.

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Open Source Users Must Beat Fear Of The Unknown

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