Concordia Health and Accident Insurance AG

Over 30 years, Swiss health and accident insurance company Concordia's IT systems had evolved and grown exceedingly complex and unmanageable. Concordia's IT began with an IBM solution in 1951, and their current system dated back to 1972. Throughout the intervening years, Concordia's IT professionals met evolving business needs by customizing, extending, and developing new functionality for the system. This growth and evolution, however valuable and necessary, ultimately resulted in an increasingly unwieldy system that was difficult to maintain and enhance.

By the summer of 2006, facing increasing maintenance costs and extremely limited ability to innovate technologically, Concordia made modernization of the IT landscape a top priority. Their objectives were twofold: modernizing their data structures and re-formatting their core applications.

For this critical strategic project, Concordia evaluated numerous proposals in response to their RFP, ultimately selecting smartShift's tool-based modernization approach, which would enable Concordia's applications to be updated to meet rising demands "on time" and "on budget".  Now underway, the project is successfully delivering a high degree of automation with a very low error rate, and is meeting with wide and enthusiastic acceptance among stakeholders.

Back-Office Overhaul
Essentially, Concordia was calling for a complete modernization of the back office systems serving its private customers. "Our initial request was simply about quickly transforming the data structures and formats of our core systems" says Cristina Conti, Concordia's CIO. The existing IT solution was not flexible enough to meet the rising demands of the business. "It was becoming less and less transparent, and more and more difficult to manage; so much so that we initially searched for a provider to implement the changes manually."

The Mannheim-based modernization expert, smartShift, was among the many companies, primarily IT consulting firms, responding to the RFP. "We evaluated many options" Cristina Conti remembers, "But finally, given the complexity of our system, risk and reliability considerations led us to reject a purely manual conversion option in favor of smartShift's tool-based modernization methodology."

Modernization with Minimal Disruption
smartShift's modernization approach enables organizations to continue maintaining and enhancing existing business processes while updated processes are implemented and integrated into the system. This approach requires an understanding of both the underlying legacy systems and the requirements for the future; smartShift's highly adaptable tools provide both a detailed analysis of the existing IT landscape and configurable automation capabilities that can be refined over successive iterations, resulting in almost complete automation of the modernization process.

"The smartShift process relies on a set of modern, intelligent software tools that can be easily adapted to virtually any platform with minimal customization," says Stefan Hetges, CEO of smartShift. The tools support and automate the IT modernization process from analysis to execution: "Within a few short weeks our experts were able to customize the existing tools to suit the specific needs of Concordia's software landscape.

"The tool-based analysis enabled smartShift to evaluate the functionality of Concordia's complex IT systems. Data-flow and interface analyses effectively mapped the myriad programs to the various business processes that they supported, providing the insight needed to divide the system into five technically meaningful and logically separate work packages. For example, all programs associated with billing were grouped into a single package that would be worked on and tested independently of one another.

From Discrete Work Packages to an Integrated Whole
The Concordia modernization project began in April 2007 and is planned for completion by autumn 2009. The project calls for each of the five work packages to be consecutively modernized and tested. The first four work packages have been completed, and work on the fifth is nearly finished.

Ultimately, over 1.6 million lines of code will be processed in the course of the project, with many custom applications included in the effort. "It was important for us to make sure we did not affect the system all at once. Packaging makes it possible to realize early successes and benefits, without endangering the ongoing processes" explains Cristina Conti. "Furthermore, other projects can be run in parallel. Without separate packages, the entire system would have been frozen."

Concordia's core applications run under zOS on an IBM-mainframe, with data stored in DB2. Batch programs are developed in PL/1, while online programs (CICS) use Visual Age for Java 4.0 in combination with the Visual Age Generator 4.5. The project does not change the IT landscape; it only modernizes the applications within it.

Additionally, the packaging process provided Concordia with a much clearer picture of the interaction between their programs and business processes, which will simplify system enhancements going forward.

Complete Automation with Near-Zero Errors
The smartShift approach guarantees an exceptionally small margin of error. "smartShift was able to adapt our rule-based tools to Concordia's business requirements over multiple iterations," explains Stefan Hetges. Automation reduced the amount of manual work, thus reducing the chances for human error; it also provided a central point of control, ensuring consistent implementation. This made it possible to completely automate the execution phase of the update process, an accomplishment that will prove valuable for successive phases of the project as well.

"We were excited at the possibility of using a highly automated and homogenous solution," summarizes Cristina Conti. "By reducing human intervention, we dramatically reduced the overall risk of errors."

High Level of Acceptance Ensures Success
smartShift's carefully planned and phased execution has enabled modernization to proceed with an ever-growing acceptance by stakeholders. Systems continue to be available during the transformation, and the modernization changes are transparent to the extent that end-users often remain unaware of the transition. "Collaboration with the IT specialists involved in the analysis and testing work is also excellent," says Cristina Conti. "This is an exceedingly strategic project for our company, and as such has the required attention of management, and the acceptance of all involved."

About Concordia
With over 650,000 clients, Concordia ranks among the largest health and accident insurance companies in Switzerland. Concordia employs approximately 1200 professionals, distributed among their Lucerne headquarters, multiple service centers in Liechtenstein, and over 300 agencies and subsidiaries.

Concordia was founded in 1913 in Zug, and began operations in Lucerne in 1914. They provide a wide variety of both group and private health, supplemental, and accident insurance products and services.