By Steve Ranger, 23 June 2005 11:45
Health insurance provider HSA is working on a £10m IT "heart transplant" which will replace the core administration systems with a new web-based system.
The company was reluctant to build the new system from scratch - as it would take too long - but didn't want to simply buy in a package that wouldn't fit its needs.
So instead HSA has taken the unusual approach of working with Indian software company Mastek to add capabilities to the vendor's existing packaged software. HSA then purchased the intellectual property rights to use and alter the bespoke system as if it had done the development itself.
Ian Maude, HSA's business service director, told silicon.com: "We can't sell it on but we can grow the business without any fees being due. I've been in IT for 30 years and this breaks the mould - and it works."
Big suppliers were not interested in HSA's novel approach, he said: "When we approached some of the big suppliers they were unwilling to give us IP rights."
The new system - dubbed Pulse - will process new business, pay claims and manage customer and corporate accounts and is integrated with the call centre, HSA's imaging and workflow system and a sales force automation application.
"IT is a key competence in financial services - we didn't want to outsource," said Maude.
The project will allow HSA to consolidate its existing systems and to offer new services, such as internet self-service, and new products to customers.
The system will also allow HSA, which has made a number of acquisitions, to operate multiple brands at the same time. "We are creating a system that has the ability to launch different products and combinations of products," Maude said.
"Over the last four to five years we've put in a lot of satellite systems, like imaging and work flow and call centres, but this is like doing a heart transplant: taking out the administrative system that three quarters of our people work on and replacing it."
The new system takes the place of an AS/400 which as been in place for 20 years. Maude said it was hugely reliable with downtime "measured in minutes per year" but HSA decided it was not a strategic platform for the future, especially with the internet becoming more important.
HSA gets around 14,000 claims per day from its customer base of around 1.2 million.
The project was approved by the board in December 2003, with the first pilot system going live a year later.
HSA's Leeds-based subsidiary is currently migrating to the new system, with HSA moving another 800,000 customers over at the end of June.
Maude explained that the business case for the £10m project is reviewed every six months. "The business case is based on the benefits that will accrue from selling new products. We believe the payback is within three years," he said.
As well as holding onto the intellectual property rights for the system, HSA is making sure it is self-sufficient by training up its IT staff - each of its developers is going through 54 days of technical training to get from AS 400 to Java and Oracle.
"We've invested hugely in our existing people and I don't want to lose any of them," Maude said.
Comments
There are 6 comments. Join the discussion
1. anonymous
Steve,
I wish them the best of luck. Going from an Iseries(AS400) to Java + Oracle, presumably running on Unix is not going to be easy.
The IBM Iseries is probably the most integrated platform there is, with minimal admin required, just set it up and go.
I would expect HSA IT staffing to double or even triple, as they move into a much more complex environment.
I would love to know what functionality they believe they can run on Java + Oracle that they can run on an AS400?
I can understand why they have done it, but I suspect they will have to spend a lot of money for that project not to end in disaster
2. anonymous
I find it interesting that they claim the AS/400(iSeries) is not strategic because of the Internet. ?? It's base support includes virtualy every IP service available, and most are industry standards (BIND, Apache, etc.) And it's not succeptable to viruses either, what a bonus!
It is also interesting that they chose Java, for which the iSeries has one of, if not THE best JVM on the planet.
With it's built in DB2 database, no Oracle charges would have been incurred and management of DB2 on iSeries is far less costly than Oracle on Any platform.
Finally, 'The AS/400 was hugely reliable, downtimes measured in munuts per year.' Well they're gonna miss that for sure in their new environment. They'll either measure minutes per day or spend a boatload of money to match the AS/400's sparkling uptime stats.
3. anonymous
Maybe extra downtime and staff on a Windows platform is a system requirement
4. Seamus Quinn
I agree with the other comments. Moving from AS/400; what an odd thing to do. And by the way, Steve, the AS/400 cannot have been in place for 20 year, the iSeries (as it now known) only hits its seventeenth birthday this month.
5. Terry
Perhaps they were tired of having one of the most secure, hack-proof systems in the world. With a wintel solution it is only a matter of time before they join the ranks of other companies that have had there customer’s personal information compromised.
6. tj lovato
More idiocy from executives who dont know anything about the as400. The Indian company makes its money by migrating you to a new system. The as400 is more than capable of performing web-based operations.
In addition, in case you dont know, this processing is different. Your fancy new web servers are Intel based and thus utilize CISC based processing. The as400 utilizes RISC based processing. You will see a substantial performance loss in the crunching or actual processing. Not to mention the migration from any RPG programs to whatever java based code your moving to. Have fun wasting your money.