Skandia UK’s aim of adopting an SOA approach to revamp its legacy systems has led to the reorganisation of its IT department, and outsourcing application development, maintenance and support to HCL Technologies.

The organisation, which provides long-term savings products such as investments and pensions, is owned by the Sweden-based Skandia Group, which was itself acquired by London-based life assurer Old Mutual in 2005. Skandia UK started operating in 1979 and since then has run the business using IBM iSeries machines – formerly known as AS/400s.

Tim Mann, Skandia UK’s customer services and technology director, says he noticed a level of entropy creeping in three or four years ago, which manifested itself in projects taking longer to get done at a higher cost. ‘We were starting to suffer from over-complexity of system architecture and design and there was also a weakness in overall architecture governance,’ he says.

As a result, he introduced the Darwin Project in early 2006, which centred on how to overcome what could become a legacy problem and re-apply the applications architecture to move forward for the next 20 years. The initiative involved reorganising the IT team to create an architectural design and implementation group. Members now undertake specialist functions, such as coding, testing or project management, rather than being technology generalists.

‘IT people like to do a bit of everything, but it is not always great value for the company,’ says Mann. ‘It was not universally well received at first, but it gave the organisation the ability to oversee resourcing more effectively and means that we have started to create centres of excellence.’

One of these centres of excellence revolves around Tibco Software’s offerings, which have been chosen as the glue of choice for all of the firm’s future integration efforts. And one of the first projects in this area involves linking multi-fund systems handling investments such as unit trusts, offered by Skandia Mutual Funds and sister company Selestica, which are being merged. The integrated system is due to go live in July, with a second functional release planned for early 2008.

The half-dozen competency centre staff will provide internal consultancy services and become experts and champions to act as a reference point for information, both among IT and business colleagues. The ultimate goal is to ensure that new SOA-based methods of working become institutionalised rather than just a one-off.

Mann felt it would not be possible to hire or train new skills quickly enough to match the company’s growth ambitions or to cut internal costs in line with Old Mutual’s expectations, so he decided to hire Indian services provider HCL.

The move will result in the IT organisation reducing in size from 300 personnel to 45. About 250 roles will move to HCL under TUPE arrangements in February, and an assessment will be made as to whether these workers are suitable for offshoring by June. Such an assessment will lead to either staff redeployment or redundancy.

‘With Darwin, I made the case that if we didn’t do it, we’d have problems, but it is also about creating opportunities,’ says Mann.

‘If we can create something that is SOA-based, the opportunity to bring products and services to market quickly is hugely increased. It is not a magic bullet and it will have to be done in stages over five or six years, but it is strategic to the company’s future.’