Service-oriented architecture is today perhaps the most widely used, yet widely misunderstood structure for insurance industry computer systems.
While definitions may vary (see the sidebar with this article), most experts agree SOA allows discrete business functions from various sources to be modularized and distributed as services via the Internet.
The insurance industry has, over the past four years or so, bought heavily into this concept in terms of quicker software development and a host of efficiencies that promise lower costs. The question now is how well SOA has delivered on the hype that has accompanied it.
“While it’s not as sexy as some of the loftier SOA hype, Web services and SOA in insurance have contributed mainly as a form of better ‘plumbing,’” said Jeff Goldberg, senior analyst at Boston-based Celent.
“Essentially, SOA has been a set of technologies and practices for more efficient sharing of data and transactional capabilities between systems, both internal and external, in a reusable way, allowing the value of systems investments to be leveraged repeatedly in subsequent initiatives,” he explained. “While this may not sound like an enterprise-redefining technology, it’s key to the [chief information officer’s] mission of doing more with less, and it’s a foundational change that will pave the way for future flexibility and efficiency.”