o Data is collected from various sources, refined for relevance, updated routinely and directed to appropriate decision-support applications.

o Those data-fed applications support online transactions, including rating, quoting, risk assessment, underwriting, policy issuance, reinsurance tracking, first-notice-of-loss reporting, claims adjustment, subrogation and reinsurance.

o Data aggregation, query and analytical tools derive intelligence from the history of online transactions and their outcomes.

o Software translates intelligence into appropriate reports.

o Reports are used to derive strategic business decisions.

o The cycle repeats.

Regardless of nomenclature, the fact remains that to compete, insurers must make more underwriting and claims decisions--more frequently, efficiently and accurately than ever before. Therefore, those decisions have to be informed by more (and better) data from more sources. The outcomes of those decisions have to be reported to more regulatory bodies and maintain more compliance standards every day. And the data must be secure and auditable.

As long as those strategic intents are fulfilled, does the method by which they occur matter? Are the contents of the black box material, if the output and the outcomes are effective?

The value of SOA lies in its ability to fulfill strategic intents. In this case, the strategic intent of insurers is to automate the integration of pertinent data into specific processes, to move pertinent data among knowledge-based applications, to integrate the services of such applications across a single operating platform, and to do all those things cost-effectively and efficiently. These are not technology strategies. While their fulfillment may be facilitated by technology, they are, rather, business strategies. Such strategies should have two operational objectives.

First, insurers should aim to streamline transaction processing. SOA lets them achieve that objective by using the Internet to enable the immediate exchange of transaction-related data. Appropriate, qualitative data helps insurers control underwriting expenses, loss-adjusted expenses and fraud. With SOA, that data can be automatically retrieved, fed to the requisite applications and integrated with the appropriate processes.

Second, insurers should aim to achieve competitive differentiation. SOA helps insurers do that by improving the ways in which they assess underwriting selections and risk exposures, evaluate and manage claims, develop fraud scores, review bills, manage cases, and generate management and financial reports. In these and myriad other ways, a data-focused technology strategy will help insurers achieve greater levels of performance, productivity, efficiency and service. And that brings us back to the black box.

Insurers should be developing business-building programs in which technologies are employed to deliver services, actualize processes and enable capabilities. Unless cost is no object, insurers should not be in the business of developing technology strategies. IT is becoming a commodity. Software is becoming a commodity. It's the rare insurer that can afford to be competitive in the IT or software businesses while at the same time competing in the insurance business.

In addition, it's the astute insurer that leaves the IT means and methods to the IT specialist--having developed the strategic business plans to be supported by the IT specialist--to maintain competitive, core-business advantages.

Likewise, it's the astute insurer that knows to focus on outcomes rather than on infrastructure, on metrics rather than methods; that doesn't let proficiency be distracted by process; that delegates cause to concentrate on effect; and that focuses on core competencies rather than functional distractions. And it's the astute insurer that recognizes the relevance of data-focused technology and respects its attendant terminology.

But, it's the wise insurer that sets and clearly communicates its strategic intents to the IT professional, cares not how they are achieved, and never even peeks in the black box.