– System Integration
Overall integrated architecture for a comprehensive view of customers
A systemic end-to-end flow between individual frontends and stable backends helps transform corporate structures. The article was published in Sapport Magazine 05/22.
Transforming corporate structuresCreating a 360-degree view of end customers by generating individual frontends from a single source and bringing them together with stable backends is a Herculean task in the insurance industry. In their heterogeneous and regulated business areas, it is particularly challenging to set up end-to-end processes, create an end-to-end flow and link the various systems in such a way that a 360-degree view is actually possible.
– Fast Lane
In this article you will learn:
- Why complex IT landscapes hinder digital transformation.
- Why it's so important to build processes from the customer's perspective.
- Why a microservice architecture increases integration scope.
- The importance of structured and consolidated data in insurance companies - and how the systems meet these requirements.
Applications and data should make life easier for users and customers with the help of suitable process and workflow engines. However, seamless processes and a comprehensive view of the end customer at the front end can only be achieved through consistent end-to-end integration. Because if consistent processes cannot be set up, on the one hand, administrators are unable to work comfortably and seamlessly with different systems - switching between numerous interfaces quickly creates resistance and efficiency losses. On the other hand, portals and apps that give end customers a jerky response to online questions create unpleasant communication experiences with the company. In the worst-case scenario, this leads to customers migrating to competitors. Central front-end layers with a comprehensive view of end customers reduce this migration risk. They support employees, brokers or external sales as well as end customers along the entire value chain of insurance processes.
Building processes from the customer's point of view
When looking at processes for end consumers, it is noticeable that low-interest topics - such as the application process or claims processing, which are crucial from the customer's point of view - and fast, smooth online communication often seem to be incompatible. Prospective customers often need different apps for different contact instances with an insurance company. Perhaps there is only one online form on the website, which in the worst case is only processed manually after a few days. In short: customer portals are often inconvenient and user-unfriendly. There are still too many media breaks.
"Microservice architecture increases integration scope"
The causes lie less in process design than in the system architecture of insurers, which in turn is influenced by group structures: Insurance companies are under considerable regulatory pressure for separation of lines of business. The Insurance Supervision Act (Versicherungsaufsichtsgesetz, VAG) obliges them to manage life, health, property and casualty insurance in separate companies. As a rule, a holding company or umbrella brand bundles its legally independent line subsidiaries. For example, the life, property, liability and vehicle insurance of a customer who trusts a single brand all bear the same logo. But these insurance policies are run as legally separate companies. And the respective line companies are not allowed to mix their business - similar to telecom providers who offer TV, DSL and mobile telephony under the same brand.
Media disruptions due to inadequate system architecture
The system architecture of insurance companies is therefore just as varied. Each line of business usually works with its own contract management and claims systems. For example, at an insurer with composite insurance, which is divided into vehicle, liability, property, life and health, the architecture ecosystem reaches up to eight different software systems from various providers.
In addition to SAP products, such as SAP PM (Policy Management) and SAP CM (Claims Management) modules, there are a large number of other solutions: for example, the core systems "Guidewire Insurance Suite", "MSG Life Factory", "Winsure" and often host programs based on early Cobol programming language from the late 1950s. Almost all insurance companies are currently in the process of replacing legacy host systems based on Cobol in particular, which have grown over decades. This is also because the maintenance effort here is enormous and there are fewer qualified developers. System diversity prevails not only in policy management systems, but also in areas such as payment transactions.
The standard software SAP FS-CD, which dominates the local insurance market, is often used here. It represents the industry-specific version of SAP FI-CA. The SAP FS-CD collections and disbursements module and insurance subledger are located in the middle of the system architecture. It not only carries out payment transactions and general ledger aggregation of the posting data. Administrators get a view of individual customers across all lines of business, similar to partner modules or customer relationship management (CRM) systems. This ensures that customer data is managed consistently and centrally.
This idea also runs through the central SAP systems - especially because SAP already offers a standard technology for front ends with SAP Fiori. Individual Fiori apps always act at the system level and not across systems. Nevertheless, together with S/4 HANA, the Walldorf-based company delivers solutions that serve customer portals with a uniform customer experience. Using CDS Views, an insurer can provide its customers with the information they need about payment transactions with significantly less effort. This makes it possible to select data from various SAP systems using SQL commands and display it in portals. The trend here is toward a decoupled microservices architecture. This obsoletes elaborate interfaces that are supposed to fulfill many requirements but appear too complex and bloated: Interfaces that are difficult to maintain, to service and simply too untransparent become superfluous.
"Complex IT landscapes hinder digital transformation".
Most companies in the banking sector and insurance industry report a clear need to improve their information technology. The traditionally managed players in particular are confronted with outdated IT landscapes: individual IT systems and databases often lack interfaces for mutual data exchange. And many current architectures make it difficult for projects that aim to implement digital business models and automate processes. A third of all digital and IT decision-makers describe complex, branched IT landscapes in their own companies as an obstacle to digital transformation.
User interface for end-to-end integration
In order to provide an end-to-end view across system boundaries, two aspects are required: on the one hand, the ability to obtain all relevant data at the right time, in the right format, and in the appropriate context. On the other hand, a front end that maps data in such a way that users can read, analyze, create, change and delete - in short: process - this data. Integration-oriented solutions and frameworks are recommended for cross-system data processing. They translate the technical and functional breaks and decouple the individual business and integration logics from each other. Depending on the complexity, this integration level can be extended for end-to-end orchestration by process-related tools such as "Pega" or "Camunda".
Consolidate and split data
rOnce such an integration layer has been built, it is increasingly easier for companies to provide their users with various front ends as intuitive user interfaces. In the case of insurers, these are assorted users such as clerks, brokers, call center agents in the inbound business, external sales, other power users, and - the measure of all things in service and sales - end customers. This requires not only data collection, but above all knowledge from data: Because insurance companies are data-driven, they structure and categorize information. They want to identify correlations and derive forecasts - for example with regard to customer development and customer value, risks, jumping-off points and much more. If they do not succeed in making distilled knowledge available to the front ends as well, these will fail. Conversely, front-ends with a true 360-degree view of these end-customers in a multi-layered user context actually deserve to be called front-ends. Thus, the core of a functioning data exchange entails the coupling of systems via integration. Success stands or falls on the interaction of the overall architecture - with flexible frontends, stable backends, an overall functional IT ecosystem and successful end-to-end integration. (cr)