Standard Life’s implementation of an SOA is a sound investment

On Demand Business defined

An enterprise whose business

processes – integrated end-to-end

across the company and with key

partners, suppliers and customers –

can respond with speed to any cus-

tomer demand, market opportunity

or external threat.

When Standard Life, an assur-

ance company headquartered in

Edinburgh, Scotland, first opened

its doors in 1825, it offered its

customers a set of quality life,

pension and annuity products.

Now, almost two centuries later,

Standard Life leads Europe’s assur-

ance industry, employing over

12,000 people and managing more

than Ł105 billion in assets for over

seven million customers worldwide.

Its portfolio has expanded to include

investments, banking and health-

care offerings that are delivered

through four independently oper-

ated organizations within the United

Kingdom: Standard Life UK, Standard

Life Investments, Standard Life

Bank and Standard Life Healthcare.

Standard Life’s implementation

of an SOA is a sound investment.

On Demand Business

“ The architecture has

improved the quality

and manageability

of in-house applica-

tions. We are building

applications on a

proven framework.”

– Ian Muir, senior manager for core

technology, Standard Life

Overview

Challenge

Simplify doing business with

multiple channels.

Why Become an

On Demand Business?

Standard Life needed to be

even more responsive to its cus-

tomers, drive loyalty within its

business channels and improve

customer service.

Solution

Expose and deploy business

services for reuse by business

partners with a service-oriented

architecture using XML services.

Key Benefits

•

Savings of more than Ł3 million

in development costs.

•

Increased transaction rate by

900 percent, without increasing

operations staff.

•

Improved responsiveness

to market change and cus-

tomer needs.

pg_0002

Creating a new, flexible architecture to enable On Demand Business

Standard Life also has international operations in Canada, Germany, Ireland,

India and China that contribute approximately 30 percent to the company’s

worldwide new business.

Doing business in the 21

s t

century is not as straightforward as it was in 1825.

In recent years, Standard Life has seen the speed and complexity of operat-

ing its business increase. The majority of its revenue is now delivered from

independent financial advisors (IFAs), many of whom use industry-sponsored

portals to obtain product and price comparisons from multiple providers on

behalf of their customers. Pressure from competitive aggregators, which can

provide IFAs with a comprehensive, single view of customer holdings, is on

the rise – as are customer expectations for faster service and online access to

their personal financial information. While Standard Life has always enjoyed

a sterling reputation for customer service, it clearly recognized the growing

need to be even more responsive to its customers and to drive loyalty within

its many business channels.

Standard Life sought ways to make working with its business channels simpler

and to improve customer service. But reducing costs was also a priority. For

Standard Life, cost reduction had implications that went beyond contributing

to its own bottom line – cost-cutting could also improve its competitive standing

with IFAs. As Standard Life lowered its cost of doing business, IFAs would have

an opportunity to lower theirs. And if Standard Life could help IFAs improve their

margins, it could foster IFA loyalty and gain a competitive edge.

Leveraging IT assets to address new challenges

To address these issues, Standard Life sought to establish a new, more

flexible architecture that would enable it to leverage its existing business proc-

ess and technology assets. In 1995, Standard Life had standardized its data

access and catalogued its reusable data services. Then, between 1999 and

2001, Standard Life defined its application development architecture and the

framework that would support it. This became the blueprint for what is now the

company’s hub-centric architecture (HCA), or service-oriented architecture

(SOA), which provides the foundation for Standard Life’s implementation of

Web services.

An SOA is a technology framework that componentizes business processes

and the IT functions that support them in order to extend those processes to

constituents, both internally and externally. Web services are self-contained,

modular applications that are designed to work together without relying on

custom-coded connections. They can be combined and recombined to meet

the changing needs of the business. This flexibility and reuse leads to shorter

“ Standard Life sees

the opportunity to dif-

ferentiate itself to both

brokers and end custom-

ers by providing the

best online experience.”

– Gary Morrison, customer service

director, Standard Life

On Demand Business Benefits

• Reuse of nearly 51 percent of existing

services, resulting in savings of more

than

3 million in development costs.

• Increased transaction rate by 900

percent, without increasing opera-

tions staff.

• Improved responsiveness to market

change and customer needs.

• Improved customer service.

• Ensures consistency of information

that customers receive –strengthening

company brand.

pg_0003

Creating a new, flexible architecture to enable On Demand Business

development cycles with less effort expended, resulting in substantially lower

costs. The list of Standard Life’s reusable business services includes verify

identity, provide life cover information and create outgoing document.

In 1999, however, Web services standards were just emerging. Therefore, to

best meet its internal needs, Standard Life developed internal XML standards

that are analogous to today’s Web services standards. As Web services stand-

ards matured, Standard Life continually evaluated them, and is now beginning

to implement these new standards as XML-enabled reusable services that are

available over a messaging hub to agents and business partners.

Standard Life’s service-oriented approach has allowed the company to leverage

its existing IT assets and applications and to align technology with its key busi-

ness objectives. Today, Standard Life’s SOA has been implemented across all

of the major U.K. operations in the Standard Life Group, and a leading indepen-

dent research firm has endorsed Standard Life’s approach to the development

of an SOA as best practice in many areas and close to best practice in others.

At the core of the SOA is IBM WebSphere

Business Integration Message Broker

software, a standardized messaging technology that allows Standard Life to

integrate its various hardware, software and platform systems. Web services are

enabled by IBM Rational

Application Developer for WebSphere software and

IBM WebSphere Application Server software.

Standard Life chose IBM for the reliability of its middleware. IBM WebSphere

Business Integration Message Broker software provides a flexible infra-

structure and simplifies the real-time integration of Standard Life’s legacy

applications with Web services, enabling Standard Life to introduce new

business services and share them with key constituents whenever neces-

sary. IBM Rational Application Developer for WebSphere software, along with

IBM WebSphere Application Server software, enables Standard Life to quickly

develop and deploy its Web services in an integrated, open-standards-based

development environment.

Measurable business benefits

Standard Life has seen significant benefits as a result of implementing an

SOA and reusing business services. Over 300 business services, such as the

ability to provide agent details, produce statements and maintain addresses,

are available for reuse by IFAs, agents and customers. Standard Life can easily

deploy new combinations of services, thereby simplifying the process of work-

ing across its various business channels. And because Web services employ

common standards, anyone, regardless of his or her technology environment,

can make use of the services Standard Life has extended.

Key Components

Software

• IBM WebSphere Business Integration

Message Broker

• IBM Rational Application Developer

for WebSphere

• IBM WebSphere Application Server

pg_0004

IBM Corporation

Corporate Marketing

New Orchard Road

Armonk, NY 10504

U.S.A.

Produced in the United States of America

2-06

IBM, the IBM logo, ibm.com, Rational and

WebSphere are trademarks of International

Business Machines Corporation in the United

States, other countries or both.

Other company, product or service names

may be trademarks or service marks of others.

References in this publication to IBM products

or services do not imply that IBM intends to

make them available in all countries in which

IBM operates.

This document is based on information provided

by Standard Life and illustrates how one

organization uses IBM products and services.

Many factors have contributed to the results and

benefits described; IBM does not guarantee

comparable results elsewhere.

Standard Life has also seen a significant decrease in client application

development times. To date, the company has been able to reuse nearly

51 percent of its services, contributing to savings in excess of Ł3 million in

development costs. With so many services available for reuse, Standard Life’s

IT department can combine services to develop and deploy composite applica-

tions more quickly and as the business needs them. As such, Standard Life is

more agile and responds to new business opportunities with greater speed.

By leveraging its catalog of reusable services and making them available to

business partners, Standard Life has been able to improve customer service.

This, in turn, differentiates Standard Life from its competitors in the eyes of

IFAs and customers using aggregate sites to evaluate and select providers.

In fact, Standard Life has been voted “company of the year” by U.K. IFAs for

the past five years.

Since Standard Life has implemented an SOA using Web services, its

transaction rates have increased by 900 percent – without the need to increase

operations staff. Moreover, by sharing business functions with key constituents,

the company can ensure the consistency of information that its customers

receive, whether that information comes from an IFA portal, Standard Life’s

Web site or from a conversation with one of the company’s customer service

representatives. This consistency strengthens the Standard Life brand across

multiple products and channels.

Combining technology with people and processes

Standard Life’s SOA has evolved over a ten-year period. During that time, the

company has learned an important lesson: that an effective service-oriented

architecture combines technology with business processes and people.

Standard Life made the important shift from having a technology-centric

culture to having a service-oriented one, and enhanced the skill sets of its

employees, by training them in XML for example, to support this culture shift.

It also leveraged and revitalized its existing IT and applications assets to sup-

port its business processes. In this way, Standard Life’s IT both supports the

organization and contributes to the bottom line.

For more information

To learn more about how you can build a service-oriented architecture with IBM

software, contact your IBM representative or visit:

ibm.com/soa

ibm.com/websphere

ibm.com/ondemand

G210-2164-01