Norwegian pension insurer Vital Forsikring ASA is poised to cut development costs by at least $2.4 million (NOK 16 million) as a result of a service-oriented architecture-based pension application, whose reusable components are expected to streamline development of a second application set to launch at the end of 2007.
Vital had first explored the SOA approach in part to ready its systems for new legislation that requires all Norwegian companies that do not currently have an occupational pension scheme to establish one by July 1, 2007. The law has the potential to drive substantial new business to the pension insurer at a time when Vital was also feeling pressure to develop more self-service options and faster service to keep pace with market trends.
Having acquired several mainframe environments running disparate applications through a series of mergers and acquisitions in the past few years, the company became interested in a SOA-based solution both from a cost perspective and because it needed to streamline and integrate its heterogeneous systems.
“We wanted to use an SOA because of the greater flexibility and reduced costs it provides,” says Rolf Nergaard, enterprise architect at Vital Forsikring ASA. “Also, the insurance products we provide are IT-intensive, and if you can’t put the product in the IT system, you can’t sell it to customers.”
The SOA-based application that Vital created uses Microsoft BizTalk Server 2006 to combine different transactions from its mainframe application and present them to employees and customers as Web services in a single Web portal. BizTalk Server, running on the Windows Server 2003 operating system, orchestrates transactions from 10 service domains that reside on the Vital mainframes as third-party and distributed applications, and abstracts them as Web services.
As a result, Vital employees can now use a single Web portal or client running the Windows operating system to quickly create and maintain members’ pension fund agreements. Caseworkers can create and calculate the cost of pension plans for new customers and their employees and maintain agreements for existing customers, recalculating the price based on a variety of factors. External customers – mainly administrators working within companies and individuals enrolled in pension plans through Vital – can use the Web portal to view their investments, make changes to their portfolios, and add new services to their pension plans 24 hours a day.
By contrast, previously Vital caseworkers spent large amounts of time learning how to use different character-based interfaces and rekeying the same data into multiple systems.
Now, Vital uses 14 application servers, each with 16 gigabytes of RAM. The database servers run on two Dell 64-bit servers, each with 32 gigabytes of RAM and 4 processors. The presentation layer runs on Internet Information Services 6.0 and two 64-bit servers. Previously, maintenance of its systems necessitated about eight hours of downtime each day.
As Vital now has begun to reuse some of the services of the core pension application for a second application to be launched by year-end, the company has started to see cost savings. This second application, which will help caseworkers to quickly provide pension plan and insurance quotes to customers by entering specific data, is currently in the planning stages. Vital estimates that the $2.4 million (NOK 16 million) expected cost savings from the use of existing components is conservative, and that further projects will build on that savings. In addition, Vital has saved development costs by committing to a single development environment.