Copyright © 2001 Business Insurance

"Systems Taking Steps, Not Leaps, Onto the Web" December 4, 2000

by Joanne Wojcik

 

 While most vendors of risk management information systems are touting Web-enabled systems, few of them are selling systems that are specifically designed for the Internet.

Instead, many of the so-called ``Web-enabled'' systems are no more than the same Windows-based systems the vendors have been selling for years, now made Internet accessible through the use of ``middleware'' programs that act as a kind of bridge between the new and old technology.

But these systems aren't all bad. That's because even though risk managers say they want their systems to run on the Web, most of them really don't. Rather, all they want is easier remote access to their existing systems. In such cases, the Web adaptations are good enough.

On the other hand, risk managers who truly want their systems to operate on the Web using browser technology will find that even those systems have their limitations.

``The Internet is just one in a series of technological advances in recent years,'' said Richard Denning, president of Shelter Island Risk Services in Shelter Island, N.Y.

But while the Web ``opens up an avenue of communication in terms of data input, the processing of claims, analysis of data and number crunching are still being done the old way,'' Mr. Denning said.

As such, ``the right RMIS must address issues other than compatibility with the Web,'' he said.

Fortunately, because Windows and Web browser technology are so compatible, it's possible to create connections between the old and new technologies so that risk managers can get all the functionality they need, along with the ability to access the system from almost anywhere, Mr. Denning said.

Most systems today are ``half and half,'' said Cheryle Tuttle, senior consultant at Computer Sciences Corp. in Jackson, Miss.

They operate on a Windows platform in a client-server environment, with the servers hosted by insurers, third-party administrators or brokers. These systems are made Internet accessible through the use of middleware programs such as Citrix and PC Anywhere. These programs allow a user at a personal computer to operate the RMIS by remote control via telephone lines.

``You can read what's there and add to it, but you don't change what's on the system. And there's a buffer of someone reviewing the information being input, so it's accurate and in the right format,'' Ms. Tuttle said.

Part of the reason for the hybrid systems is the learning curve, she said.

``People are not comfortable with being totally dependent on the Internet. What if their Internet connection goes down? And what about security?'' Ms. Tuttle asked.

In addition, data conversion can be very expensive, ``so you take it one step at a time,'' she said.

Lucent Technologies Inc., for instance, is slowly moving its RMIS to the Web.

``Presently, our claims and litigation management systems are using Web technology,'' said Paul F. Buckley, treasury director-risk management at Lucent's headquarters in Murray Hill, N.J.

``We're working with Shelter Island Risk Management on the system and data integration project and, in six months, our data warehouse will be Web-enabled. Lucent is way ahead of the curve,'' Mr. Buckley said.

``We're migrating the old system, but we're also building connections between vertical silos of data that didn't exist before,'' said Shelter Island's Mr. Denning.

The decision to move to Web technology is related partly to economics, partly to efficiency, Mr. Buckley explained.

``Data is the most critical element we have. As we're asked to do more and more with less, it's still critical to get that information to people. It's a time-saving tool,'' he said.

Mr. Buckley said he wants Lucent's RMIS, which currently is available to about 100 employees, to be made accessible to more than 100,000 individuals companywide.

``Our long-term strategic plan is for every manager to be able to pull profile reports off the system,'' including ``what buildings they have, what vehicles, their work comp losses, etc.,'' he said. ``I want everybody in the company -- and even some outsiders, like our captive manager in Vermont -- to be able to look at the data.''

While the communication, data warehouse and publishing functions use Web technology, the number-crunching and analysis will continue to use Lucent's old Windows-based RMIS.

``But it appears seamless to the user,'' because both the Windows and Web-based systems are accessed from a single Web home page, Mr. Buckley said. ``One of my struggles, as a risk manager, is to find a system that does it all,'' he said.

Disney Worldwide Services Inc. of Anaheim, Calif., is shopping for a Web-based workers compensation claims administration system.

``One of our system requirements is that there be at least limited functionality over the Web, if not all,'' said Rick Duggan, Disney's manager of workers comp. While the Web may not necessarily expand the capacity of the system, it may increase the speed at which data is transmitted and accessed, he explained.

Among the functions Disney seeks to perform via the Internet are:

* Facilitating the collection of claims from various remote locations.

* Allowing for telecommuting, either from employees' homes or from temporary work locations.

* Providing limited access to other departments that need to review part of what's stored in the claims system.

Mr. Duggan said that, fortunately, he's found that most vendors today can provide, at the least, Web accessibility. And even those with limited Web capabilities are working on expanding and enhancing those features, he noted. Mr. Duggan said he even saw some product demonstrations that were conducted entirely on the Internet.

Disney, which began its search for a vendor in September, plans to make a selection by the end of the year. The company's objective is to have the new system, which will replace a 13-year-old character-based DOS-like setup, up and running by next October or November, Mr. Duggan said.

Approximately 50 to 60 Disney employees will have access to the new system, he said.

While it's easy to find Web-enabled systems today, it's a lot harder to find systems that were built using Web browser technology, consultants say.

For example, ``one vendor called me with a 25-year-old application and said, `We're Web-accessible.' But it still has to go through some middleware,'' said David P. Duden, national RMIS practice leader at Deloitte & Touche L.L.P. in Hartford, Conn.

Middleware is a type of software program that provides users with access to older technology systems via the Internet, Mr. Duden explained. Citrix, made by Citrix Systems Inc. of Fort Lauderdale, Fla., is one of the programs he sees most often, he said.

In addition, systems that are written in hypertext mark-up language, or HTML, also are said to be Web-enabled, because the documents they produce can be posted on the Internet.

But ``that's not Web-enabled either,'' Mr. Duden said. ``To me, a Web application is one that has not been converted and is not using middleware to make it think it's a Web application. With a truly Web-based product, everything's on the Internet.''

Because a Web-based RMIS is hosted on a server outside the company where it is being used, it's easier to maintain and upgrade programs, he explained.

In addition, Web programs are ``object-oriented,'' Mr. Duden said. That means that one ``object,'' or line of code, controls every related function in a given program. That's why changing one object in one part of the program will change it everywhere else in the program.

``If we were Web-enabled (at the end of 1999), you could make the fix for Y2K simply by changing just one object in the program,'' he said.

Programs easily integrate with one another in a Web environment, because they are written in the same programming language, Mr. Duden said. And more users can access a Web-based system without any additional investment in hardware or software. That ability distinguishes Web-based systems from client-server systems, which are usually hard-wired together in a single location.

The security has improved significantly on the latest generation of Web-based tools, Mr. Duden said. In addition to encryption technology, Web-based systems have firewalls and digital certificates-software that limits accessibility by recognizing the internal serial numbers of the computers that are tapping in.

But many a risk manager remains uncomfortable about putting sensitive information on a server outside the company's four walls.

``If you're on an intranet, there's more that can be made available because of security concerns,'' said David A. Tweedy, national insurance principal at IBM Corp. in Providence, R.I.

All of these attributes, when taken together, make Web-based systems easier and less expensive to maintain, Mr. Duden said. Converting data from an old legacy system to be used on a Web-based system will add costs upfront, but it will save money in the long run, he said.

``The big savings will be on maintenance,'' Mr. Duden said.

Consultants point out, though, that Web technology does have its limitations.

For example, it's a lot easier to do ``multitasking''-operating more than one program at a time-in a Windows environment than on the Web, which operates just one program at a time, said Brian Mack, director of sales and marketing at Valley Oak of Alamo, Calif. Valley Oak sells a RMIS adapted to the Web.

``With Windows, you can open multiple programs at once, but with browser software, you can't. And, sometimes, if you miss a field (when filling out an online form), it takes you back to the beginning and you have to start over,'' Mr. Mack said.

In addition, Web browser technology can't yet perform sophisticated number-crunching like that performed by character-based Windows systems, Mr. Mack said. ``The Windows interface is a better interface than a browser if you're doing sophisticated computing,'' he said.

But there are some functions, such as claims reporting, that can be done more easily with browser technology, consultants say.

``One of the best uses of the Internet is transmission of management information or new claims data and exposures to the risk manager's office or broker,'' said IBM's Mr. Tweedy.

``The Web is good for doing loss reporting, making lists or drilling down into claim details,'' agreed Ken Ancora, national marketing manager at Risk Sciences Group Inc., a unit of Crawford & Co. in Schaumburg, Ill. ``But if you want it to do `what if' scenarios, forget it.''

Another disadvantage to Web-based risk management information systems is that they are subject to Internet traffic, which can slow them down, Mr. Ancora said. This may require an additional investment in high-speed transmission lines, such as DSL or T-1.

``The Web is in its infancy,'' Mr. Ancora said. ``The coding tools are still being developed, while non-Web applications are more mature.''

``The day will come when we'll be able to do everything that was done on the big machines on the Internet,'' but that day hasn't yet arrived, Mr. Tweedy said.

``You can't put vast amounts of data through Internet connections,'' Mr. Tweedy explained. ``There has to be some sacrifice. Web-enabling is more difficult than you think.''

``Anybody thinking of Web-enabling the claims process has to consider what they want online,'' he said. ``First reports of injury? Lists? Remote reporting of claims and new policies is a very exact business process. You want to do it right.''

In some cases, a risk manager may have to revamp his or her business processes to adapt to the new technology, Mr. Tweedy said.

``They should look at those processes they've been doing under the old arrangement and ask if it still makes sense today or three or four months from now,'' he said.

Indeed, ``some older systems may have been designed with a different business process in mind,'' Mr. Duden said.

``Data conversion is another fun thing,'' Mr. Tweedy said. The data must first be confirmed for accuracy and integrity, then converted to another format. But because there is no standard, formats vary, he said.

``You can't just take years of code and rewrite it,'' Ms. Tuttle said. ``Conversions are so expensive, and you may be converting years of data you'll never use.'' Instead, it may make sense to keep that old data in the ``back room,'' on the old RMIS, to use as reference, she suggested.

``It takes a long time to create your exact system out on the Internet,'' Ms. Tuttle explained. And, in most cases, ``if you're going to new technology, you have to make changes.''

Many insurance technology experts look to extensible markup language, a new messaging standard for data exchange, as the panacea. ``There will have to be a conversion to XML,'' Mr. Tweedy predicted.

``Everybody wants to be on the Web, but they're really not sure what they want,'' Ms. Tuttle said. ``What they really want is 24/7 access to information, and that's what the Web can provide.''

But that doesn't mean risk managers have to throw out their existing systems. If it ain't broke, don't fix it, experts advise.

``Sometimes, it's just tweaking that you need,'' Ms. Tuttle said. In such cases, it may be necessary only to add modules, such as middleware, to provide Internet access.

A lot depends on how well the existing system is meeting an organization's needs, Mr. Tweedy said. ``They ought to evaluate the process before deciding whether to change technology,'' he said. For example, a risk manager for a large bank may need to upgrade because the bank's other systems are being replaced. ``In the meantime, if it's working, don't replace it,'' he said.

``You have to do a cost/benefit analysis,'' said Peter Langan, e-business team leader at ERC/Industrial Risk Insurers in Hartford, Conn.

``If it's a 2-year-old system, it's probably advanced enough to support browser technology'' and can be upgraded rather than replaced, Mr. Langan said. ``But a 15-year-old mainframe-based system-I'd think long and hard about modifying it.''

As for those risk managers intent on replacing their old systems, there are some vendors offering Web browser-based systems that they claim can do everything a Windows-based system can do.

For example, Los Angeles-based Mitratech Inc. has developed a browser-operated RMIS that can manage claims, risk and litigation, all on a single platform. The system also has an XML layer on top of it that allows the system, called Team Connect Enterprise, to ``talk'' with other computer and claims systems, such as those operated by insurers, TPAs and brokers, said Laden Behnia, president and chief executive officer of Mitratech.

``It has a very powerful reporting capability that is completely Web-based,'' Ms. Behnia said. Mitratech's RMIS can produce loss triangle reports, charts and graphics, and can do in-depth data mining, she said.

Cambridge, Mass.-based Delphi Technologies also has a browser-based system that is capable of performing high-level analytical functions such as creating loss triangles, according to Patty Morey Walker, Delphi's director of sales and marketing operations.

``While Web systems are certainly less mature, there's nothing stopping them from doing that kind of hard-core analytics,'' said Steve Fischer, senior vp at Marsh Risk Technology in New York. Mr. Fischer heads up the broker's StarsWeb product, a new version of Marsh's STARS program that was written specifically for use on the Internet.

ERC/Industrial Risk Insurers has built a Web-based system that can be integrated with Windows programs where necessary, said Mr. Langan. The program also has an XML overlay, he said, because ``XML will be the standard in the next 18 months.''

Aon Risk Monitor has either matched or bettered the functionality of Aon's Windows-based Omega RMIS, said Kathy Burns, Aon product manager based in Glenview, Ill.

Aon Corp. opted to invest in the creation of a Web-based product because it regards such technology as the wave of the future, she said.

``At some point, support for the old software will go away, like the old mainframe support did,'' she said.

 

© Copyright Business Insurance 2000, 2001