When ACORD finds something they like, they want to share it with everyone. This year at the ACORD Conference that something was XML. Fully one-half of all scheduled sessions were focused on, or discussed XML. It seemed like every speaker was asked to work XML into their presentation. Im not suggesting that XML isnt incredibly useful, that XML isnt at the heart of the latest developments in distributed computing, or that Web services doesnt absolutely depend on XML. But give me a break! The September 13, 2000 edition of USA Today featured an article on the hottest thing on the web XML. Come on ACORD drop the hype you were scooped by McPaper two years ago.
Seriously, ACORD has made great strides in promoting XML-based standards for both the P&C and the life sides of the business. ACORD has wisely decided not to attempt to dictate how or which systems the industry should use. Instead, they are developing standard messages that any system can use. The life XML standards are more mature, as they were an extension of the OLifE object model developed a few years ago, but the P&C side is gaining momentum. ACORD now provides many workable DTDs that define common business messages and transactions. They are also working on a new eMerge initiative which will unify all ACORD standards. The stated goal of eMerge is to integrate existing ACORD standards into one common standard and partner with other standards bodies. eMerge will facilitate a more efficient transfer of data between trading partners worldwide. Lloyd A Chumbley, ACORD program manager for eMerge, said As we move into the future, eMerge will enable our industry to better leverage all of our technology assets by providing a standard, platform neutral language for all insurance transactions.
Satisfaction Guaranteed
The town meeting on the first day of the conference focused on strategic initiatives facing insurers. Stiff competition, increasing awareness of customer needs, globalization, and technology are the forces driving change in our industry. The message is twofold do whatever it takes to satisfy the customer and embrace the technology. Insurance needs to have a customer-centric focus if you dont adopt that philosophy you can be sure your competition will. The challenges facing IT strategies are manifold. The insurance industry has typically invested a much smaller percentage of gross revenue (two to three percent) in technology than its sister industries banking (four to five percent) and securities (seven to eight percent). IT departments are typically so wrapped up in tactical work that they dont have the time (or the resources) to think strategically. According to the panel, those companies willing to spend the money now to strategically plan their future technologies will be the most successful. The bottom line times may be tough but dont ignore your (technology) future while focusing on todays revenue.
Understand One Another
This session was followed by a discussion on the business and IT response to strategic issues. The panels advice was straightforward business units and IT units need to understand each other. IT should not be viewed as just another cost and the technology people need to understand the business process. An innovative IT department can be a source of significant revenue. It will probably be necessary to revamp business processes to obtain the maximum benefit of the Internet. This will require a real change in the way we do business effective utilization of Web technologies involves more than putting a wrapper around your old mainframe systems. Pervasive, connected information systems represent a different wave in technology. That wave can be best characterized by what we are calling Web services.
John Sculley delivered the keynote. Sculley was CEO and president of Pepsi when he was called in to rescue Apple Computer. I suspect he will probably be best remembered as the man who fired Steve Jobs. I saw Sculley deliver a keynote about 15 years ago when he was CEO of Apple and I must report that he still likes to talk about his favorite subject John Sculley. That aside, he did provide some insights into the state of business in 2002 along with some cautionary advice about financial engineering the bottom line can be manipulated in a variety of ways, but at the end of the day we all have an obligation to fairly and honestly report earnings. In light of the recent Enron debacle, I suspect this is sage advice.
Sculley went on to discuss technology in general and software in particular. He sees software becoming commoditized in the same manner that successful entrepreneurs such as Michael Dell commoditized personal computers. He said we are now on the dawn of an era where pervasive technology will be indispensable. Successful businesses will employ technology at the right time. If we pressure our technologists to show ROI before investing in technology there is a good chance we will be too late. There can be a great advantage in being a second mover on technology there is generally no advantage in being a third or fourth mover.
It is always interesting to hear tales from those individuals who travel in different circles than we do and Sculleys talk was worth hearing. I was particularly intrigued when he quoted Andy Grove of Intel about the 90s. He believes that we shouldnt be concerned about the dot-com mess because we accomplished in five years what would have taken 10 years in normal times. I guess the lesson here is that some of that VC money was spent on something beside Beamers and double latte cappuccinos.
Why So Many Standards?
Following the keynote was a session lead by Jean-Franois Abramatic, who until recently was chairman of the World Wide Web Consortium. Prior to that he was associate director of the MIT Laboratory for Computer Science. It is rare that we have the opportunity to have a discussion with a technologist at this level. Unfortunately Abramatic must have been forewarned about insurance people because he dumbed down his presentation and gave a broad overview of the history of the Web and the organization of the W3C. It was still an interesting presentation, but I would have enjoyed something a bit more technical (or maybe a bit more anecdotal). The session ended with Abramatic repeatedly being asked why there are so many different XML standards for the insurance industry and which one is best. He graciously and diplomatically attempted to explain that the W3C wasnt in the business of defining industry specific semantics or recommending data dictionaries. The W3C, after all, provides the general framework in which we are free to implement whatever standards we define and choose. Some folks just dont get it.
The real story in technology at ACORD was Web services not XML. XML may be the lingua franca of the Internet, and XML DTDs and schemas may be the actual results produced by the hard work of ACORD committees, but Web services are what make it all worthwhile. Aons Kevin Schrage and Calypso Systems Rik Chomko described Web services as a loosely-coupled, programmable application component that is accessible via standard Internet protocols. Right now there are two paths to implementing Web services, Suns J2EE (Java 2 Enterprise Edition) and Microsofts .Net (pronounce dot-net). I witnessed an interesting demonstration of .Net technology where author and Harvard professor David Platt created simple .Net client and server applications in real time during a presentation by the Microsoft evangelists. Microsoft is definitely interested in assisting in the development of ACORD standards. Kevin Kelly, Microsofts managing director, financial services, said, By focusing on the development of XML standards for the industry, ACORD has turned a potential slide into irrelevance as a waning EDI standards body into a tremendous re-emergence as a critical resource for the next generation of insurance application development. XML initially seemed only to be an easier method of replacing old-world EDI with a new technology … but it is so much more today. XML Web services lie at the heart of a brand new era of software development and ACORD can make an even larger contribution to carrier-agency productivity than ever before with their continued efforts.
Whats Your Complaint?
ACORD has provided the insurance industry a great service with standardized forms. They have been working diligently to provide electronic standards that have the potential to be as ubiquitous as their forms. It is not an easy task to bring different companies working on different platforms together and have them agree on standards they can all live with. I still hear a lot of complaining about too many standards with no real consensus on which standard to use. The fact remains, however, that ACORD has produced XML DTDs and messaging standards that are being used in the industry today and will continue to be used in the future. Dave Brasington, president of Spidertek (an early implementer of the ACORD OLifE standard and now involved with XMLife and other ACORD standards) explained the evolution of the process. He noted that five years ago ACORD technology groups were designing standards for software that hadnt even been written yet. Now that production systems are actually using ACORD technology standards, the future development and deployment of those standards is accelerated. It is after all much easier (and less risky) to adopt technology that is proven. Is that what we call a second mover advantage? PAUL ROLICH
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