Innovation is IT's strategy for business opportunity

A passionate believer in the "art of the possible", Peter Kiwi Wilkinson, principal architect at Norwich Union, says senior executives need to take more of a blue sky approach to technology because innovation is the key to successful IT strategies.

Once upon a time, Wilkinson said, the core activities of the insurance company's IT department was automating processes, making administration cheaper, writing software and implementing packages.

"Back then, the business gave IT requirements that had to be delivered; we were simply a service provider," he said.

"We no longer automate, we provide opportunity."

But today, Wilkinson said the IT department is a "trusted advisor" involved in business propositions, strategy, architecture and design.

"We keep the big picture in-house and the rest we can offshore," he said, pointing out that Norwich Union began offshoring last year and now has 400 staff based in India.

"Cost savings are only part of the benefit. It's all about flexible resourcing and having additional capacity on tap because internally we want to spend more time on architecture and the route maps to take us forward."

As the UK's biggest insurance company with more than $600 billion in assets, Norwich Union has a substantial internal IT shop made up of 1600 application development staff as well as hundreds of legacy systems.

Even in such a complex environment, Wilkinson says the IT strategy is about speed and flexibility making IT a differentiator by "doing things our competitors cannot do".

To achieve this, Wilkinson said the insurer established an Innovation Group 18 months ago to spearhead new products and services that are first to market.

"Sadly, the freedom to innovate is underestimated, but our Innovation Group is proving that it works; some real opportunities have come out of it," he said.

Right now, the 30-member innovation team is rolling out new initiatives such as the pay-as-you-drive scheme in England which places black boxes in cars. There, about 5000 customers are using the boxes which can radio the position of the vehicle so premiums are paid based on the roads travelled and at what time of day. "A business manager wouldn't even think of an idea like that," Wilkinson said adding that the innovation team is measured on successful outcomes not on what fails.

"We have also undertaken mobility trials over the past 12 months and are rolling out BlackBerries and tablet PCs to our top 200 executives which is part of our Workplace on Demand strategy."

Such innovation has allowed the insurer to diversify. As the biggest whitegoods purchaser in the UK, Norwich Union is now selling whitegoods online and it is further exploiting its bulk purchasing power by selling cars.

"We are lucky we report directly to a CEO who recognizes the value of IT," Wilkinson said.

With some 1000 systems, it takes a lot of resources to move forward, he said.

"We have a Z/OS mainframe heritage with some Unix and Windows NT," he said.

Happy with the stability of Windows NT, Wilkinson isn't planning an upgrade for some time.

SOA: No whizzy vendor tools required

Norwich Union principal architect Peter Kiwi Wilkinson says he has been tackling service oriented architecture (SOA) for almost eight years.

"You can do SOA without whizzy vendor tools; we have been doing it for years using Cobol and mainframes," he said.

"When I first began doing it my objective was to insulate systems with generic interfaces to reduce the impact of change by writing reusable modules that could be stitched together.

"I recognized the problem and the concept long before the SOA term was coined and back then, the tools weren't there."

Wilkinson will be getting some assistance with his SOA strategy next year implementing IBM's WebSphere version 6.

He said there are plenty of benefits that come with SOA and the goal is to have a common data format in the middle with each system responsible for translating into a common format.

"At the moment people translate from source to target; the more sources you have the more you duplicate translation.

"Regardless of the system, you need to have a common input and common output for standardization."

Norwich Union has strategic alliances with a number of vendors, "but we don't want to be in bed with them".

"An SOA strategy ensures this doesn't happen. We want the tools to deal with mergers and have greater flexibility," he said.

"We want vendors to fit into what we want to do; we don't want to be led by them.

"The danger is that a vendor's view of SOA is for you to fit in with their tools rather than their tools fitting in with your business."

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