Balboa Insurance Group Inc. needed to integrate its legacy-based customer data with an enterprisewide CRM system. Executives considered a costly systems conversion project, but opted for a middleware solution instead.Balboa Insurance Group Inc. faced a modern-day information technology conundrum. It had critical customer information locked away in its siloed host applications and couldn't get it out to support new Web-enabled business processes.

The Irvine, Calif.-based subsidiary of Countrywide Financial Corp. needed to extract the customer data so that it could be integrated into Countrywide's new corporatewide Siebel 7 eBusiness Application initiative. The goal was to provide a single-screen view of all Balboa customer accounts, rather than the cumbersome process of toggling through various green screens to capture the data.

To accomplish this, Balboa needed to find an integration platform that would make its legacy information data compatible with the Siebel 7 customer relationship management (CRM) tool.

That's because the Siebel 7 CRM tool relies on modern client/server technology and information architecture, and it can't capture or extract needed customer data from old-fashioned host systems.

"We have many years worth of investment in our legacy applications built on mainframe technology," explains Craig Korotko, senior vice president and CIO of Balboa Insurance Group Inc.

"With the growing demand of our business partners for real-time processes, we knew that we had to rebuild all of our applications or enable them so that we could extend their life expectancy to meet the demands of Web services," he adds.

Balboa did consider discarding its legacy systems and switching over to client/servers in order to implement Siebel's CRM solution into its insurance operations.

Sanity first

"For a brief moment, we asked ourselves what it would take to rewrite all of the policy administration systems using modern technology with relational databases," says Korotko. "Then sanity returned and we said, 'Gee let's find another route.'"

Had Balboa converted its legacy systems into modern-day client/server architecture, Korotko estimates the process would have lasted more than three to five years and the return on the costly investment would have been very "long-term."

So rather than address this host integration challenge with a homegrown solution or switch to client/servers, Balboa decided to go with a middleware product. "This way we were able to build components and connection points to our legacy applications that would extend their life and usability within our operations," says Korotko.

The Balboa information technology team, including Frank Natalizio, vice president and manager of computing services, worked in concert with an IT development team from Countrywide. Together the team of more than 50 members used a rigorous matrix screening process before choosing the Verastream software package produced by WRQ Inc., Seattle.

Unified view

WRQ's Verastream gives Balboa a solid integration platform that ties legacy data and applications directly into the Siebel 7 user interface. Using this middleware as the integration platform, Balboa's legacy insurance applications are now linked into the Countrywide's corporate CRM solution.

The middleware provides a real-time, unified view of host-based customer accounts. Balboa and Countrywide can manage all of their workflow and business processes from within the Siebel 7 environment. Without such a product, development staffs often would have to duplicate Siebel 7 business logic in external systems-a time-intensive and error-prone process.

"Creating a complete view of a customer can be challenging when key information is locked away in host systems," says Shaun Wolfe, president and COO of WRQ-a software maker that specializes in extending host applications.

Without disturbing mission-critical operations, Verastream encapsulated key Balboa host functionality in loan tracking, policy and claims management applications into reusable services and made the information available to Siebel 7.

Now, instead of scrolling through multiple green screens, Balboa customer service representatives, claims adjusters and business partners can view up-to-the minute account information through a single CRM interface. Users no longer have to toggle between different host applications because the CRM middleware interface captures customer policy, loan and claims data in real time.

In addition, "the integration allows Balboa customers to use the Web in order to self-serve themselves and obtain the status of a claim," points out Prasantha Jayakody, Verastream product manager for WRQ.

"In the past, this was done over the telephone or through a customer service representative," Jayakody adds. "Previously, the customer representative had to go to a policy management system and get information. Then the representative had to go to a claims management system and find a claim number. And, the representative had to go to a third system to figure out the status of the claim.

"Now, the representative needs to just look at one computer screen and get all of the information. Also the customer can access the information on the Internet."

Real value

What's the real value of this software?

Countrywide considered addressing this host integration challenge with an in-house solution, but the project was judged too costly and time-consuming.

Moreover, the corporate IT development team needed a solution that could be used in a repeatable way across Countrywide's 14 various divisions and business units. Balboa was the first adopter before Country-wide began implementing the Verastream product across the company.

"If we look at time to market, bringing in a CRM package and a middleware product and having them available and in production in six months, that's our greatest value," exclaims Korotko.

"To build the same capabilities in-house would have required at least two years, so the time to market and the benefits we gain are on a much quicker basis. This way we have an 18-month benefit versus taking 24 months of development time to build such a system in-house. I think that speaks to IT costs and value," explains Korotko. Balboa's internal rate of return on the purchase of this system is 18 months.

Balboa brought in the Siebel 7 tool and Verastream's middleware at the same time. "We were looking at the CRM solution as the common front-end driving the workflow process. Verastream allowed us to connect Siebel 7 with all of our back-end policy administration systems," Korotko says.

Balboa has three policy administration systems with unique codes and interfaces.

"By using a Web-enabled front-end, it makes it easier because we don't have to train people in each of our unique policy administration systems," adds Korotko. "We are able to translate and manage the data going in and out of the applications as well as extend those services beyond just a dumb green screen that people were accessing beforehand."

Plain English

The Verastream software brings all that information to each claims adjuster's or customer service representative's desktop in a simple, easy to understand process. (Balboa is running Windows 2000 on Compaq server technology.)

"Now we don't have to teach them how to read the various codes for each of our host applications. The information comes to them in a integrated process that is written in plain English," Korotko explains.

"Our Web-enabled front-end now determines what policy administration system to access as opposed to a user determining that," he adds. "This is truly where the value is . . . to be able to take a person and put them almost immediately into production versus going through weeks of training on how to access the system and how to interpret the codes."

The carrier also benefits in another way. Balboa-which has grown from $170 million to $560 million in revenues in the last three years-can now support incremental sales growth without adding claims or customer service staff.

No complaints

Balboa executives say they haven't encountered any drawbacks from the project.

"We've been delighted with the product. The technical support, the consultative sales process and the implementation process was everything that we could have asked for," Korotko says. "The vendor has been 'there' for customer support and training and consultative services. We can't complain."

The implementation, lasting from June to December 2002, required Balboa to build infrastructure supports as well as make some code changes for integration purposes.

"A time-to-market of six months illustrates that the internal changes weren't all that extensive. That's what we like about the product. You can approach it in several different ways and make it non-invasive (few changes) or a recomposition (many changes) of your processes," adds Korotko.

Brian Moskal is a Chicago-based business and financial writer.

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