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04:07 PM
By Ravi Koka, Polaris Financial Technology
By Ravi Koka, Polaris Financial Technology

What Matters in IT: Part 3, Business Impact of Architecture for Continuous Migration (ACM)

The paramount IT tasks for every firm should be to shift to the most agile possible approach for dealing with legacy issues, thereby reducing legacy spending, and then devote the freed-up funds to innovation instead of to overhead.

This article is the third in a series of three on ACM — architecture for continuous migration. [Click here to read part 1: What Matters in IT: the Power to Change.]

In the insurance industry, new-product rollouts often are delayed by 12 to 18 months because the various systems that handle processes such as sales, underwriting, billing and claims are so difficult to change. Companies risk losing an edge to firms that are investing in innovation and architecture, and dealing with legacy issues more effectively. ACM — architecture for continuous migration — gives them a means to do so.

Ravi Koka
Ravi Koka, Polaris Software Labs Inc.

Here is an example that shows what is at stake for insurers without the means of agile adaptation: Recently a neighbor of mine visited the websites of two major, household-name companies. Each offered online quotes for auto insurance. The first company's site, after collecting some routine data, displayed a message saying the process could not be completed online. This was annoying, since my neighbor not only has a clean driving record, but has held another policy from the firm for over 20 years! The second company's site collected the same data and more, produced a quote, and displayed a click-to-purchase button — all within minutes.

Who gets the business? Company number 2, of course. And while company 1's site may not let down every visitor, the result wasn't surprising. The second firm is known in the industry as having the more agile and adaptable systems of the two. The other is still mired deep in the legacy morass, playing catch-up.

The paramount IT tasks for every firm should be to shift to the most agile possible approach for dealing with legacy issues, thereby reducing legacy spending, and then devote the freed-up funds to innovation instead of to overhead.

ACM requires a solution architecture and design that separates the various layers in application software — user interface, business logic and data access. The business logic layer is abstracted using an industry standards-based data model and business rules externalized and maintained so that it is easy to change and also insulates the users from the core administration and transactional systems.

A look at ten firms worldwide that have embraced ACM will demonstrate the results it enables: a diversified B2B manufacturer in Europe, insurers based in the U.S. and Australia, and others. These early adopters of ACM have seen results beyond what even the typical best-practice firms in many industries have achieved:

• They have enjoyed reductions of 25% to 30% in the total cost of ownership of an application.

• Time and cost of business-process changes were cut by one-half or more, in some cases much more — which means the ability to go to market twice as fast, too.

• Customers are served better while employees are freed to do innovative or highly productive work — and not only IT staff, but customer-facing employees and managers.

• The firms report improved reliability of IT systems, with fewer business interruptions.

The latter achievement is a side benefit of the fact that ACM greatly simplifies the process of changing business rules and functions. Within the status quo ante, almost every change required rooting through tangles of the firms' legacy systems to rewrite numerous strands of code in which the rules were embedded. Not only is that process time-consuming, it raises the risk of introducing code errors which can become breakage points. Since a full ACM approach centralizes business rules and isolates and component-izes applications, changes can be both easier and less likely to lead to failures down the road.

Better yet, implementing ACM is not expensive and can be done gradually, making business operations highly scalable. Adding a new channel and users to a system, for instance, is not nearly the hassle it normally would be for firms with decades-old legacy systems. With ACM, the user-interface layer is decoupled from the back-end layers, so again there is no rooting through the systems for massive rewrites.

About the Author: Ravi Koka is CTO, Insurance & Portals, of Polaris Financial Technology Limited, a provider of enterprise software for the banking and insurance industries. Prior to joining Polaris Koka founded SEEC Inc. and successfully completed the company's IPO on Nasdaq in 1997. Koka started his career with System Development Corporation (originally a division of RAND) and was an adjunct associate professor at CMU. Polaris Software labs acquired SEEC in 2008.

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