December 8, 2011 – As an IT solution for complex integration, service-oriented architecture (SOA) has seen success in some insurers’ organizations. However, from a business and architecture perspective, it leaves more to be desired, according to a new report issued today by Boston-based research and consulting firm Celent.

“Business-Oriented Architecture: SOA Refocused,” outlines a new concept, business-oriented architecture as a process that allows insurers to define their business model and processes to drive IT and SOA, rather than the opposite. The result will be greater business value, notes senior analyst Ben Moreland, author of the report.

Moreland asserts that SOA’s maturity over the years has enabled it to address the large IT pain points of complex and expensive integration hurdles created by the distribution of IT system solutions across the business. By allowing insurers to reuse similar business functionality, create standards-based interfaces and, in more mature organizations, provide SOA governance to maximize the IT benefits of lower maintenance costs and quick project delivery, SOA is seen as a success. But SOA does not address business models, rather, it addresses how to best implement business processes within systems.

"SOA addresses IT bottlenecks, not the business process,” says Moreland, “so it will never allow businesses to focus on business process efficiencies and effectiveness because it’s rooted in IT. However, SOA has provided the bridge to allow insurers to take back control and accountability for business processes and drive IT, and this is exactly what IT wants."

Further, adds Moreland, SOA moved the religious IT war from Java versus .NET to SOAP versus REST.

“Many SOA evangelists, including myself, have stated that SOA grew from structured programming to object-oriented methodologies and CORBA. We cited the nonstandard nature of these early abstraction attempts and the promise of using standards for loose coupling. SOA was supposed to be about business value as much as IT benefits, but it dug into the IT trenches and lost its business perspective.”

Enter the notion of BOA, which is based on three simple principles—implementation independence, location independence and contracts.

These three principles allow business and enterprise architects to get beyond the stumbling blocks of IT and SOA (e.g., implementation standard debates, such as SOAP versus REST) and focus more on business needs to realize and achieve business agility, speed to market, and lower TCO of their systems.

“Businesses need to redefine and document the business model in terms of the business process and business services those processes need to operate. They need to define their processes without the limitations that IT has created over the years,” Moreland says.

Moreland says that BOA will not solve the IT legacy problems that exist in many midsize to large insurers, but should allow IT to architect solutions that are more closely aligned with the business.

“The focus on BOA is the business, business models, business processes (independent of implementation), and customers. In its ideal state, BOA should not have any dependencies. It is 100 percent driven from business goals and objectives, customer expectations and regulations. It should drive SOA—not the other way around.”

This article originally appeared at Insurance Networking News.

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