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In spite of the best-of-breed vs. suite argument of ten years ago, it is not possible for any insurance organization to use just one system for daily operations, let alone back office administrative functions, reporting, and management purposes. While integration of multiple side-by-side systems may be simple for organizations with large, skilled, internal IT teams, the same is not true for the rest of the industry.
Fortunately, the days of building a complex, expensive enterprise service bus (ESB) and spending millions in consulting dollars in order to accomplish even the simplest of integrations are largely over. Don’t misunderstand, integrating different applications, both within the enterprise and with external systems is an infinitely complex task. In addition to existing on-premise (on-prem) software, insurance organizations now have to include web, cloud, and mobile applications. As application platforms multiply, traditional integration technologies are struggling to handle the influx, and organizations are finding that managing integrations is more than a full-time job.
As more applications are added to a company’s IT infrastructure, the more complex the integration process becomes. Today, integration tools are available to ensure a continuous, seamless flow of data between different applications and provide a cost-effective, scalable and reliable way of delivering the right information at the right time to the people who need it. A new breed of integration solutions now offer the remedy required.
The Proliferation of Data, Applications, and APIs
Analysts and other independent research show that the ability to successfully integrate data and applications is now a competitive differentiator for modern businesses. Information from Network World indicates that data volumes are increasing by over 50 percent per year, the major sources being business software. On top of that, the cloud and SaaS applications that organizations are using have dozens, if not hundreds, of application programming interfaces (APIs). Managing the proliferation of data and API connections is a complex issue that must be addressed in order to avoid downstream problems, including too much inaccessible business data and too many data and application silos.
The Problem of Legacy Integration
Many complex integration problems stem from the continued use of outdated legacy solutions.
One approach to integration, which still persists in many organizations, is custom-built integrations. These are typically hard-coded and require a significant depth of technical skill and a sound understanding of the technology. These custom-built integrations are cumbersome to support, and when data formats, structures, or requirements change, it is not a simple task to update the integration code.
Enterprise Service Bus
Another traditional integration solution, as mentioned earlier, has been the ESB. This middleware technology was conceptualized in the 1990s and designed for stable, batch-oriented applications that run behind a firewall. The need now is for an integration solution that can handle both real-time and batch integration needs, that has been built for cloud and mobile usage, as well as on-premise, and can work with a variety of communication formats and protocols.
Ensuring data access between applications, or with third parties, adds another layer of complexity. The old process of nightly batch data transfers has evolved into point-to-point interfaces, but these demand unique technical skills which inevitably lead to a high degree of inflexibility. Complex and costly architectures, like electronic data interchange (EDI) and extract-transform-load (ETL), make data exchange even more tedious and expensive.
Today’s sophisticated, complex IT ecosystems render old-school integration tools less-than-agile in the face of cloud-based initiatives.
Modern Integration Approach
Recently, Gartner has commented that many CIOs have not yet recognized that traditional integration strategies cannot cope with rapid innovation and the accelerated pace of business, especially since 2020. For the modern business, more streamlined technologies are needed to integrate the systems of the future – on-prem, cloud, and mobile applications, as well as lightweight and edge services. This will require new solutions which encourage more agile development approaches, allowing for more rapid iterations, and a reduction in the complexity of integrations.
Packaged development platforms, Integration Platform-as-a-Service (iPaaS), are becoming an accepted option for easily creating integrations in on-prem and cloud environments. An iPaaS is used for building and deploying integrated applications both in the cloud and in the enterprise. It replaces and improves the integration provided by on-prem middleware connecting multiple in-house applications and cloud-based SaaS applications.
How IPaaS Addresses New Integration Challenges
Because iPaaS applications are cloud-native and built with flexibility and scalability in mind, modern integration challenges can be handled more easily.
Organizations are finding there are several challenges when integrating on-prem systems and cloud applications. An iPaaS addresses these issues by providing seamless integration, maintaining security and data integrity, protecting internal systems behind the firewall, and managing communications to cater for bad signals.
As mobile and cloud apps proliferate, using an ESB becomes more complex and inflexible. Driven initially by the pandemic, more business applications began moving to support remote and mobile access. The best way to deliver this is by building APIs to provide real-time access to business data. But the growth of APIs raises concerns about the security of data transfers between applications. An integration platform enables systems to be streamlined for more robust, secure data flow.
Technical debt is the result of taking development shortcuts instead of doing a more thorough, usually longer, job. Like financial debt, the longer it takes to pay it off, the more interest is accrued. It is a competitive disadvantage that grows over time. Organizations incur significant technical debt by keeping legacy systems going rather than engaging in the expensive, time-consuming rip-and-replace initiatives required for replacement. However, by using an iPaaS, companies can support existing legacy IT business systems while implementing more modern systems, as well as new, agile, cloud-based software.
Adding IPaaS to IT Architecture
Increasingly, a business system architecture is composed of a combination of monolithic applications and other loosely connected applications either on-prem or in the cloud. An iPaaS can support these complex IT systems and architectures with greater flexibility, at a lower cost, and better scalability than traditional service bus applications.
As organizations become increasingly digital, applications will interact not just with other software, but also with people, intelligent devices, and ever-larger volumes of data. With a modern integration platform, CIOs can enhance the value and usefulness of data assets and avoid incurring unnecessary technology debt.