March07EdNote

Here's a tidbit for you trivia fans out there. Originally, the soundtrack for the “It's a Small World” Disneyland attraction included several national anthems all playing at once. But Walt Disney wanted one song, which was the impetus for what in short order would become one of those instantly recognizable tunes.

Fast forward about 40 years. Today, everyone in insurance IT wants all systems to sing one song and has started to hum the classic in a slightly updated version: “It's a SOA World.” And just as the lyrics say: “It's a world of laughter, a world of tears; it's a world of hopes, it's a world of fear.” Wouldn't you agree this could sum up the highs and lows of implementing a different approach to technology, such as SOA (for more, see the SOA special report, p. 22)?

Service-oriented architecture has been heavily hyped, but for a change, the reality seemingly backs the buzz. Maybe the reason for its success is SOA has been delivering business value and not merely infrastructure rationalization, which probably would put a gleam in the eye of only the tech guys. In addition, it works well whether for internal or external application–something for everyone . . . and something that also generates gobs of surveys.

A recent Celent insurance study indicates more than half of respondents “are using Web services/SOA in live, mission-critical systems, and all large insurer respondents had at least a pilot program in place.” In addition, “the most common use is in linking together internal systems to support the new-business process followed closely by linking external systems (e.g., requirements vendors, agency management systems) for new business, with more than half of all respondents using Web services/SOA as part of their new-business architecture.”

A McKinsey survey of senior IT executives highlights the internal and external applications, commenting: “Traditionally, companies pilot any new integration technology within the firewall, and broader adoption for integration with trading partners follows a few years later. The fact that so many IT departments are already moving beyond the internal pilot stage means that enthusiasm for this trend is high.” That's pretty good for something lots of people have had a hard time even defining!

I'll spare you several other surveys that essentially make the same points. The bottom line is, just like a stay at Disney, SOA is turning out to be a feel-good experience that even the cautious insurance crowd is embracing and deriving many benefits from, for example, in the areas of new products, customer experience, partner experience, and speed–all contributing to revenue growth and cost reduction. I can hear it now from the halls of the IT department and the offices of the business side: “Though the silos divide, and the enterprise is wide, it's a SOA world, after all.” All together now . . .

Sharon S. Schwartzman

Editor-in-Chief