by Galen Gruman

Case Study Early Adopter – Getting Ready for Web Services

Mar 01, 2003 8 mins
Web Development

Switzerland’s Winterthur Insurance and Life & Pension knew in 1997 that it needed to replace its IBM OS/390-based application platform for new applications and some existing ones. Universities had stopped teaching the system, therefore making it increasingly expensive to hire development and maintenance staff. But what to replace it all with?

At the time, the IT industry was focused on Internet technologies?unproven and novel as they were?which led Winterthur’s Credit Suisse Group subsidiary to look into the available tools. That investigation revealed that Java and other standards-based technologies could best support the development of new applications?and offered the potential to make those applications more easily accessible outside headquarters to other Winterthur offices, insurance and pension brokers, and client companies. As a result, Winterthur began developing Web services “before Web services was even conceived,” says Massimo Pezzini, vice president and research director of application integration and middleware strategies for Stamford, Conn.-based Gartner.

Today, Winterthur has standardized its Swiss operations on its new platform and is rolling it out globally. Like modern Web services, the platform’s application infrastructure relies heavily on reusable application components connected through a standard messaging and interface platform. The difference is that Winterthur had to do much of the heavy lifting that standard platforms built around Microsoft’s .Net and Sun’s Java provide today because those technologies inevitably need to integrate into the existing environment.

Despite the hurdles, Winterthur’s Swiss division has ported 30 applications, and more are on the way in divisions throughout Europe. Client-oriented applications include online quotation, risk management assessment, claims reporting and customer data updating, while internal users can access applications for data warehouse-based marketing campaign management, financial analysis and reporting, and health insurance bill processing and verification. Java supports the application environment, and the Object Management Group’s common object request broker architecture (Corba) provides the communications method.

Building Blocks

Winterthur had used its existing IBM OS/390 platform and other IBM hardware for years. “But it was not scalable. It was complex, not easily distributed and required too much logic on the client side,” says Eric Aumont, the engineering vice president who led the new platform development. To resolve those issues, the IT staff looked at Corba to be the exchange mechanism between its OS/390, database, content management and ERP systems with Java-based clients. “But Corba was too risky in 1997,” Aumont says, since the standard was still evolving and did not yet support the PL/I mainframe programming language.

By mid-1998, however, Winterthur had settled on a mix of a now-improved Corba, client-side Java and server-side C++. “Java was not scalable enough from the server side,” Aumont says, so Winterthur needed Corba as “a message broker to coordinate all these things.” Being an IBM shop, Winterthur considered IBM’s Object Broker as well, but it was not yet production-ready, so Winterthur chose the available alternative, Iona’s Corba platform. In the fall, Aumont’s team of five had ported the first application?one that let client HR departments directly manage changes to pension plans?to the new platform.

But that port was “on an easy platform?three or four machines,” Aumont recalls. And Winterthur still couldn’t rely on Corba to connect clients to a mainframe. Winterthur and its vendors had to work hard to make the technologies work together reliably, recalls Aumont and Iona Technologies CTO Eric Newcomer.

Those efforts let Winterthur get serious about implementing the Java and Corba technologies broadly in the organization. The ability to broker messages from OS/390 applications meant that Winterthur could have all its applications?new and legacy?connected through the Iona platform. That was the key for the company to ultimately be able to offer its service-oriented architecture.

Winterthur will eventually replace many of its OS/390-based Cobol and PL/I applications. In fact, such a migration was a big focus in 2002, with three applications ported in Switzerland that year. The migration team has also grown, from the five in 1997 to about 30 today.

Throughout the migration effort, the team reused the business logic from 30 years of OS/390 applications. Ironically, the new services platform helps extend the life of the mainframe, says Gartner’s Pezzini, since it makes the mainframe’s applications and business logic reusable just like any other platform component.

Java Lab

Because Winterthur started its effort in 1997, it had to test and help vendors fix technologies still under development. “It was essentially a laboratory to architect Java and the Internet,” recalls Aumont.

While beginning early let Winterthur get the service platform running before many of its competitors, that fast start also created a complex technology legacy that companies today could avoid. For example, in early 2000, Winterthur’s engineers were exploring enterprise Java beans (EJB) to manage components and provide standard services such as security in enterprise-class applications. But EJB resulted in “lots of problems with distributed storage, security, scalability, failover, resources, load balancing and response time,” Aumont recalls. Also at first, platform provider Iona’s EJB tools were incompatible with C++, “so we had a parallel operation of Java with EJB and C++ on the server side,” says Aumont. In the end, Winterthur’s Corba-Java combination resulted in a “very complex architecture,” notes analyst Pezzini, one that today could be avoided with a pure Java or wholly Microsoft .Net approach.

Big Investment

Although a company starting today could bypass some of the early adopter expenses Winterthur faced, the price for such a move remains steep. Although neither Winterthur nor Iona would discuss costs, Pezzini says similar efforts by European financial services companies cost around $100 million. And while the operational savings and increased revenue from being able to sell new products more quickly will eventually pay back that investment, such an up-front cost “requires business management commitment, to say the least,” Pezzini says.

For its part, Winterthur didn’t approach the project with a specific ROI, although Daniel Lisetto, Winterthur’s e-Platform Solutions Centre vice president, estimates an ROI of 15 percent to 20 percent per year, which Pezzini calls reasonable for an early adopter. When it started the effort in 1997, Winterthur simply believed the architectural approach would allow faster deployment of new applications, which is key in an industry such as financial services where companies succeed by quickly repackaging products into new variations, says Pezzini. “The ability to reuse the existing assets and to be able to deploy projects based on more modern technologies is key to us,” says Winterthur CIO Martin Frick.

“It makes sense to develop one application for all market units to rationalize IT operations,” adds Lisetto. “This reduces the cost of deploying common applications and brings all information to the front office [at brokers, internal departments and clients].”

The Transition

Now Winterthur is eyeing the next step: modern Web services based on today’s standards, which would let even more customers, brokers and staff connect to its systems. That would increase self-service opportunities that in turn could save Winterthur money and speed up processing. And Winterthur’s transition to modern Web services will be relatively easy, says Gartner’s Pezzini, because the company has already divided application logic from presentation and connectivity.

A few more steps remain, however. The current platform requires client software and thus restricts usage to those connected to the Winterthur network. Users must also access applications separately. At some point, however, Aumont says he hopes to deploy a portal to provide single-point access to many applications. And by the end of the year, he plans to integrate the platform applications with enterprise applications such as SAP.

Still, many implementation challenges remain, Aumont says. “The biggest challenge is security,” including authentication and authorization, he notes. “You need to spend 15 percent of your time on security in an integration effort. We need standards to reduce that.” Winterthur’s current platform integrates different security models and propagates the information among various systems, Aumont says. But for Web services, he wants a single security model. Unfortunately, such a security standard doesn’t exist yet, so he plans to deploy Web services slowly, perhaps implementing limited services as appropriate security components become available.

Belief in the Model

Winterthur believes the platform provides a key competitive advantage: agility. “Winterthur can change business practices faster than other competitors in the market,” Lisetto says. “We can convert different services as needed for business reasons.” Aumont concurs: In the Swiss unit, “we now have 30 applications based on the same infrastructure, the same frameworks, the same security.” Under the new platform, “when you have to maintain it, it’s easy. In the traditional model, you have to change every application. It’s not very economical,” he says. For example, adding a new type of insurance option previously required updates to each insurance application. Under the new platform, only the insurance business-logic and forms-presentation modules need to be changed.

For CIO Frick, the new platform is a major vehicle for Winterthur’s IT efforts going forward. “The platform is one of the most successful pan-European initiatives in the Insurance and Life & Pension divisions. There is a huge chance for us to bring together our vast pool of IT resources in the various market units and start thinking about intelligent ways to use those resources across the borders of the market units. Too long we have reinvented wheels in parallel with no, or only little, synchronization between various countries.”

With the common platform and its service architecture in place, Winterthur expects to use those resources to better compete in a Web-oriented world. n