Standard Life is pushing the use of a service oriented architecture (SOA) to the heart of its IT strategy as it seeks to share information more effectively across the company and to make its business processes more effficient.
Standard Life's IT director, Keith Young, said that its use of SOA will be key in helping the company reach its financial targets. It has been especially useful since Standard Life floated as a public company in 2006.
Balancing the need to produce strong financial results in the short term with the need to invest in new applications to remain competitive places the SOA concept at the centre of Standard Life's IT strategy, he said.
"As a PLC, there is a focus on producing short term results, but IT continues to be a long term business investment for the company," said Young.
The SOA approach to software design promotes modularity, allowing organisations to develop new software applications of separate parts or existing pieces of software code.
Young said that reusing common software code in modernising and replacing older applications has saved it approximately £16m over the cost of developing programs from scratch.
The company is using SOA to build a customer database application, to replace the legacy system it inherited from Prime Health Ltd (now known as Standard Life health), which the group took over in 2000. It expects to complete the project later this year.
"We are currently re-writing a completely new application to replace the one we acquired in the Prime Health acquisition using Java and DB2. We are using SOA to ensure the application can fit with our group systems - to share customer information between groups better and over different platforms," he said.
This approach means that Standard Life is not building separate applications for different channels, which could be expensive. It can quickly extend the service to new channels, such as mobile phones, if customers demand it, improving the insurer's time to market over its competition.
"A customer will have access to the same business service whether they are using interactive voice response through the telephone, or whether they use the internet," said Young.
"It also ensures consistency. The customer gets the same information, the same experience, whatever channel they use to communicate through," he said.
Standard Life now has a catalogue of 470 business modules it can deploy. When the time comes to build a new application, the first development step is for programmers to look through the catalogue of its existing services and use what is already there, said Young.
Although the financial services industry as a whole is making progress in developing best practices for implementing SOA, serious challenges remain. Promoting a culture which designs new applications through code reuse first is the main one, said Gartner.
Box: What makes a mature SOA deployment
More-mature SOA adopters are firms that have more than 25% of current applications based on SOA and design new applications so that they can be offered as a service and/or included as a component of another application, a 2008 Gartner report said.
Less-mature SOA adopters are firms that only update their legacy applications with Web services and do not make a conscious effort to build a library of services from the new applications they design.