A Solution to Services Oriented
Modernization for Insurance Carriers
Modernization for Insurance Carriers
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Joint Webinar by Hexaware Technologies & Oracle Modernization Solutions
10 August 2009
Hexaware Overview
15
thLargest Software Exporter
178
Active Clients Served
W ld id (D ’08)
5200
Employees Globally (Dec’08)
(NASSCOM) Worldwide (Dec’08)
p y y ( )
56
Million-Dollar Clients
66
Fortune / Global 500 Corporations
262
USD mn Revenues in CY ’08
(Dec’08) as Clients (Dec’08)
Team Profiles
Tom Laszewski, Technical Director – Oracle Modernization Solutions
• Over 20 years experience in databases, middleware, software development
• Established the initial the Oracle Modernization Partner Ecosystem – including some of the largest partner channels
• Master of Science in Computer Information Systems from Boston University
Durgesh Hattangadi Project Director Hexaware Technologies Durgesh Hattangadi, Project Director – Hexaware Technologies
• Over 15 years in IT Architecture & Program Management
• Keen interests are UML-based design/architecture, SOA, Legacy Modernization
• Bachelor’s Degree in Electronics & Communications Technology from University of g gy y Bombay
Ghanshyam Upadhyay, Project Director – Hexaware Technologies
O 18 i h d th BI&A d li t t H M b i &
• Over 18 years experience heads the BI&A delivery team at Hexaware Mumbai & manages key large accounts in Europe.
• Apart from Business Intelligence his interest areas are Data Modeling , Statistical and Economical Modeling and Central Banking
Objective of this Webinar
The need for Legacy Modernization and the need for exposing business functions as
services within the insurance carrier and also with partner applications is well known.
However, with varied approaches & varied products, compounded with the existing
,
pp
p
,
p
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enormity of application and business complexity, the challenges associated with a LM
initiatives are huge.
Join this two part webinar where:
•
Oracle presents the Legacy Modernization Stack from Oracle and learn how
the Oracle Modernization team helps in implementing the right roadmap
•
Hexaware Technologies showcases two multi-year legacy modernization
initiatives for its customers
each having its own unique challenges and the
initiatives for its customers – each having its own unique challenges and the
diverse approaches used to achieve similar objectives
“Early in this decade, the architecture group at The
Hartford determined that SOA would be the most cost
effective way to replace aged COBOL applications”, he
said.
"We have systems that are as old as I am," Moreland
said. "[They're] at least 30, 40 years old and they're still
ki
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t
ti
th
"
working. So, we're trying to retire those."
Benjamin Moreland
Business Climate is Changing
Focus is on Business Transformation
Focus is on Business Transformation
PACE OF BUSINESS
I i t ti f
INNOVATION
C i d
Increasing expectations from customers and partners to provide answers sooner
Companies are under pressure to bring products and services to market faster
GLOBALIZATION
Customers, supply chain, and competition have all become global
REDUCE COSTS
Relentless pressures to drive additional efficiencies…do more with less
global
"In a time of accelerating turbulence, the
g
,
valuation of a company will be strongly affected
by how it executes change."
Typical Legacy Environments
Hardware Platforms • IBM mainframes (13,000 +) • IBM AS/400 (300,000 +) • Bull GCOS • Dec Alpha Databases•
Sybase•
VSAM, ISAM•
IMS/DB•
DMSII • Dec Alpha • Unisys Operating Systems • MVS, OS/390, z/OS•
ADABAS•
DATACOMM•
IDMS Programming Languages • TPF, z/TPF • VSE, VM, z/VM • VAX/VMS TP M it Programming Languages•
COBOL•
Assembler•
PL/1•
NATURAL TP Monitors • CICS • IMS NATURAL•
COOL:Gen•
C/C++•
Fortran"
By 2008, organizations that have not developed a mainframe
modernization strategy risk losing the opportunity to leverage this
portfolio due to a decline in skills and knowledge of these systems.”
Modernization Payback
70
80
Stay on
50
60
70
Stay on
mainframe
Re-host to lower
legacy
Modernize
30
40
Re host to lower
cost platform
Cumulative SavingsModernize
0
10
20
Project Investment Break-Even Point0
Y1
Y2
Y3
Y4
Y5
Y6
Y7
Y8
Y9 Y10
Legacy Realities and Consequences
Intense Pressure to Minimize IT Costs and Increase Agility
• Maintenance for 1000
Legacy Skills are Diminishing • Loss of business process knowledge as of Business-Critical Applications are on 66%
MIPS legacy environment runs $3M-$5M/yr
• Lock-in and high cost limits funds for new i iti ti p g people retire • Increased risk to supporting, enhancing core li ti pp Legacy Platforms initiatives
• High integration cost and time-to-market delays impact front-end agility
applications
• IT cannot react quickly to emerging business requirements “Gartner predicts1 by 2008 of IT Budget 60-80
%
35M LOC Gartner predicts1, by 2008,organizations that have not developed a legacy modernization strategy risk
losing the opportunity to leverage this portfolio due to a decline in skills and
of IT Budget Consumed by Maintenance Cost (Apps and Systems) Maintained in Legacy Apps at an Average Fortune 100 Company
portfolio due to a decline in skills and knowledge of these systems (0.7
probability).”
Oracle’s Approach to Modernization
Provide Modernization solutions that can be implemented
• Oracle Database Maximum Availability Architecture
• Hot pluggable Oracle Fusion Middleware including Tuxedo and Oracle Coherence
• Oracle Applications and Oracle Application Integration Architecture
Work with partners who provide the means to get there
S t I t t
• System Integrators
• Specialty modernization vendors
• Products and tools that add value to Modernization solutions
Act as your Modernization Trusted Advisor
• We have the modernization expertise – Average SME has 20+ years experience
• FREE architecture planning POC and ‘jump start’ hands on technical resources
• FREE architecture, planning, POC and jump start hands on technical resources
Oracle’s Architectural Vision
Integrated Solutions
Integrated business processes
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p
Integrated business intelligence
Integrated user interface
Standard components
• Certified configurations
• Synchronized releases
y
• Easier to manage
• Greater security
• Higher reliability
Multiple Modernization Approaches
COTS Replacement
custom apps with COTS: Oracle Apps for HRMS, CRM, Financials, Procurement
COTS Replacement
custom apps with COTS: Oracle Apps for HRMS, CRM, Financials, Procurement
Oracle
Oracle
Re-Architect
By uncovering business rules,
Re-Architect
By uncovering business rules,
Service
Orientated
Service
Orientated
Oracle
Modernization
Oracle
Modernization
y g ,mining models and forward-engineering to re-useable services, BPM flows, and Business Rules.
y g ,
mining models and forward-engineering to re-useable services, BPM flows, and Business Rules.
Orientated
Modernization
Leave applications on MF, extend in place via adapters, WS, etc.
Orientated
Modernization
Leave applications on MF, extend in place via adapters, WS, etc.
Re-Host
Migrate to open systems with
Re-Host
Migrate to open systems with
Automatic
Migration
Automatic
Migration
automated process, preserving code and data, SOA enable and integrate
automated process, preserving code and data, SOA enable and integrate
Mi
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Migration
Convert 4GLs to COBOL or Java, PL/I to C/C++, etc.
Migration
Convert 4GLs to COBOL or Java, PL/I to C/C++, etc.
Service
Orientated
Batch
Orientated
Modernization
Oracle BPELCICS & IMS
CICS & IMS
Portal
CICS & IMS
CICS & IMS
3270
O l BI
Access
COBOL
Oracle BI Oracle Data Integrator
E-LT Metadat E LT Agent ISAM/VSAM /IMS/D t / DB2 Oracle ESB Metadat a E-LT Agent /IMS/Datacom/ IDMS
Oracle and Service Orientated Modernization
System Enterprise Enterprise Manager Manager GOVERNANCE REAL-TIME VISIBILITY & Alerts BAM BAM Events CEP CEP Enterprise BPA Suite BPA Suite CICS IMS/TM VSAM Adapters AdaptersBPEL Process Manager BPEL Process Manager
ORCHESTRATION GOVERNANCE y Monitoring Web Services Web Services Manager Manager &
PROCESSING Business Monitoring Data Streams p Modeling BPM Suite BPM Suite VSAM IMS-DB Tuxedo Data Integrator Data Integrator
Oracle Service Bus Oracle Service Bus
ROUTING & DATA SERVICES Native BPEL Business Rules Human Workflow WS Policies Security Enterprise Enterprise JDeveloper JDeveloper Business User Modeling Adabas DB2 IMS-DB CDC CDC NonStop Routing Transform Data
Quality ETL & Replication g g Mediation R i t R i t SOA lifecycle governance Repository Repository Application Development Framework p p Oracle Coherence Oracle Coherence VSAM SQL Server Partners Partners NonStop OpenVMS AS/400 IDMS Datacom
J2EE Application Server
MessagingUDDI
Registry Registry
JRockit VM & RT Java and .Net Caching
Oracle Coherence Oracle Coherence
Datacom
Service Orientated Modernization with Hartford
Legacy Target Facts
• Hartford Insurance • COBOL based system
Legacy
• Services Oriented Architecture
• Reduced time to market by 75%
Target Facts
COBOL based system • 4 - 6 month to deliver
business changes • 30 staff needed for
• BPEL
• Abstracted services from existing legacy
• Reduced TCO
• Created a plug in play environment for future 30 staff needed for
production implementation
applications changes
• Increase Business agility • Can replace underlying
services with open systems in future
Large Insurance Claim Processor –
Architecture and Benefits (In progress)
Architecture and Benefits (In progress)
Improved response time
• Cache hits provide sub-second response time
Clients
Improved scalability
• The data grid will scale linearly with increased demand
• As more members migrate to this platform, new application servers are easily added
Improved availability
Oracle WebLogic
Oracle Coherence Data
Improved availability
• Linear scalability protects against unexpected shutdowns from sudden spikes in volume
• If the mainframe goes down, the middle tier can still
Oracle Coherence Data Grid
service transactions against cached data
Reduced mainframe costs
• Plan to eliminate millions in annual mainframe costs
Mainframe
Mainframe
IMS/DB Database
Re-Hosting
BatchSI
Same Environment
Same Environment
COBOL
ISAM/VSAM 3270COBOL
JES
COBOL 3270 Oracle RAC ISAM/VSAM DB2 Oracle TuxedoTuxedo as a rehost platform
Intranet/Internet Clients POJO ● JSP/Servlet .Net ● J2EE ESB Messaging Web Svcs. ● EJB/RMI JMS MQ ● FTP ● SMTP Web ServicesOther Applications and Services
Application and Transaction Services
Oracle Tuxedo
CICS
Web Application
Server Oracle Jolt Portable Java
Client
CICS or IMS Emulation
CICS Transactions (COBOL) WTC WebLogic-Tuxedo Connector Servlets implementing 3270 UI Session Services WebLogic Tuxedo Connector Tuxedo Services and App Monitor Oracle Database Grid
tn3270
Re-hosting Case Study – Groupama
• World's 3rd largest property and
casualty mutual, 2nd biggest
Legacy Environment
• Migration of mainframe life insurance portfolio
• Strong ROI with 2 year break-even on the project
Modernization Project Results
y , gg multi-line insurer and the leading mutual insurer in France
• Annual revenue of € 14.2B and l € 9B 1 3M
p
management system and Back Office applications & data to open system HP-UX environment
p j
• Launched new initiatives in banking, auto insurance and financing, agriculture
insurance, health & provident assets close to € 79B. 1.3M
insurance contracts
• Expensive mainframe costs (hardware, maintenance) L li ti b f
• Three migration projects carried out in parallel • Powered by Oracle’s high
perform. re-hosting
architecture using Tuxedo
insurance
• Leading to €544M in net profit (+34%) and ROE of 14.4% (+2.9%)
• Legacy application base of 1,600 programs
• Concerns about IT agility, skill sets in a fast-moving,
competitive environment
architecture using Tuxedo and Oracle DB
• Migration Partner:
• Cost savings boosted margins and enabled Groupama’s stock market flotation
competitive environment
“Our mainframe environment was not durable. We chose an automatic migration method that has given us control of our applications, with a breakeven time of around 2 years.”
Case Study Walkthrough
Overview of Hexaware Modernization Stack
• Involved in modernization projects since 1998• Large pool of Enterprise Architects
• SOA expertise on IBM, Oracle and Microsoft platformSOA expertise on IBM, Oracle and Microsoft platform
Customer Background
Customer Profile
•
Largest manufacturer-independent leasing company in Germany
•
Turnover of over 5.4 B Euro
•
With more than 40 years of existence, 1200+ employees &
y
,
p y
about 70000 customers
Need for Legacy Modernization
•
With multiple systems and no single view into a customer,
customer experience ratings were low
•
Rollout of new products and cross selling takes a huge time
Rollout of new products and cross selling takes a huge time
•
Enhancements to Legacy applications was very difficult due to
Snapshot - Legacy Modernization
Duration: 3 5 years Team Size: 400+resources Effort Estimated: 5000+ Person Years
•Application Security
•Back up and Recovery
•Quality Assurance
•Infrastructure Consulting
• Data Migration of over 100 GB of • Dedicated testing team for end-to-end
Duration: 3.5 years Team Size: 400+resources Effort Estimated: 5000+ Person Years
Other Services
Infrastructure Consulting
• Data Migration of over 100 GB of historical data covering
-Assessment Extraction Cleansing Transformation
Dedicated testing team for end to end testing of the entire landscape
• Unit / Module Testing
• Regression Testing
• System Integration Testing
• Performance Testing
Services
• Integration to SAP system and 25+ other systems
• Design, Development &
Implementation of Refinancing and a s o at o
Loading
Re-engineering
and 25+ other systems
• Development of batch and online interfaces that includes the following steps:
• Integration Need Assessment
• Architect & Design
Implementation of Refinancing and Collections system
• Development of Batch Updates and Reports with Unix Shell script
• Maintenance of Legacy Mainframe systems – Offer, Contract,
•
80 legacy applications on mainframe, client-server and old web technologies•
Migrated 4300 legacy programs to8M+ J2EE code
•
Involved Code Mining, Reverse / g• Implementation
• Interface Maintenance
• Extensive Custom & Legacy Integration
• Adapter & Connector
D l t
y
Collections,
Refinancing and Asset Management
Forward Engineering
•
Evolutionary & Incremental approach DevelopmentApplication Landscape - NOW
Functional Landscape
Technical
Landscape
Case Study Walkthrough
Why Insurance Carriers Modernize
• Provide improved service to brokers, agents & customers
• Bring new products to market more quickly
• Provide improved service to brokers, agents & customers
• Bring new products to market more quickly
Increase
Business
Bring new products to market more quickly• Better business intelligence for sales analysis, profit analysis
Bring new products to market more quickly
• Better business intelligence for sales analysis, profit analysis
Business
Agility
• Minimize Reliance on Legacy Skill sets
• Make use of older technologies that are dying out
• Don’t be the last one using a technology
• Minimize Reliance on Legacy Skill sets
• Make use of older technologies that are dying out
• Don’t be the last one using a technology
Mitigate
Legacy Risk
gg gygy• Reduce multiple environments resulting from mergers
• Reduce multiple environments resulting from mergers
Reduce
• Reduce multiple environments resulting from mergers and acquisitions• Consolidating the number of technologies and using packages where appropriate
• Reduce multiple environments resulting from mergers and acquisitions
• Consolidating the number of technologies and using packages where appropriate
Reduce
Total Cost of
Customer Background
Customer Profile
•
Top 5 Insurer in Belgium in both life insurance and non-life
•
Over 5 B Euro turnover and 30 B Euro in assets
N
d f
LM
Need for LM
•
Time to market for new products
•
Need for “rule based” straight through processing for New
•
Need for rule-based straight through processing for New
Business, Claims and Underwriting
•
Bring multiple LoBs (Bank & Insurance) under a single
g
(
)
g
system
Strategy & Overall Roadmap – 3 Year Plan
Phase 1
•
Mine Business
Phase 2
•
Implement the
Phase 3
•
SOAize all
Phase 4
•
Expose
Rules from the
existing application
•
Identify the
Ins rance Prod ct
Business Rules
Engine in 3
rdParty product –
VPMS
customer
centric internet
applications
Common look
important
legacy
components as
SOA services
Insurance Product
Definition rules
VPMS
•
Implement
Product
Configurator &
•
Common look
and feel
•
Single
customer view
SOA services
in a phased
manner
g
interface with
existing legacy
PAS
customer view
Hexaware Contribution
• Solution definition and selection of business rules engine
– Provision of consultancy services and help preparation of RFP for product selection
• Unraveling of the business rules from legacy systems
– Around 3300 business rules were extracted and documented in English and local languages
• Configuration and implementation of rules engine - VPMS
• Application changes in view of the business rules engine
– Modification of existing legacy applications to call rules engineModification of existing legacy applications to call rules engine
– Integration of applications with rules engine
• Bringing uniformity in applications across organization using SOA
– Development of middle (business) layer components using a modern J2EE based (spring like) framework
framework
– Development of front-end layer using a presentation framework
– Integration of applications through common portal
Benefits:
Benefits:
• Substantial reduction in time taken for new product roll-outs
• Saving of effort, time and money in maintenance of existing applications and development
