Magic Software Enterprises, a provider of state-of-the-art integration and development technology, announced that recent survey results showed that top technology decision-makers in the insurance industry are struggling with budget constraints as they face decisions between spending on immediate integration projects and overall integration architecture.

More than 200 senior life insurance industry decision-makers recently participated in the business integration survey sponsored by IBM and Magic Software, in conjunction with Lapis Business Solutions.

The survey results revealed that IT spending in the business integration sector is not as immune to overall economic trends as some had previously thought. Seven out of 10 insurance industry IT executives identified cost of integration project implementation as a very important factor while fully 91 percent saw business integration costs as either an important or very important issue to their organization. This emphasis on cost containment certainly makes sense in the current industry climate.

One clear answer to economic pressures and competitive opportunities is to implement technology initiatives designed to attain cost-savings, increased productivity and efficiencies, such as application integration and business process management projects, especially in heterogeneous environments. In fact, about one half of the respondents are considering a UNIX, Linux or iSeries platform for their business integration server.

Fully one-half of interview participants say they plan to move ahead with an application integration project within 18 months. But typical budgets range between $200,000 and $300,000, much lower than the cost of traditional integration projects. Half of all respondents plan Web enablement of legacy applications while 40 percent of those surveyed plan content management and other legacy integration projects. Customer Relationship Management (CRM) integration is on the agenda of fewer than eight percent of insurance companies surveyed.

"Quite a few insurance industry IT execs are following a two-track approach to achieve the promise of business integration (EAI) and business process management (BPM)," said David Leichner, vice president of worldwide marketing for Magic Software Enterprises. "One track consists of the development of an all-encompassing EAI and BPM strategy involving investment in a new integration architecture – a strategy that may not result in a major project success even in the next two years. The second track involves going for quick wins through relatively small integration projects, thus the short timeframes and lower budgets."

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