Case Study:

I before E

1 December 2006

One of the largest insurance administration companies in Denmark, Sampension operates in two main areas: the administration of labour market pensions for nearly 300,000 government workers, and the administration and maintenance of portfolios for several large customers, worth more than DKK70 billion in total.

Until January 1999, Sampension's business area was an integrated part of Kommunernes Pensionsforsikring (KP). Now, all the administration is managed by Sampension. The market in which Sampension works is very politically regulated as well as competitive. It requires the rapid development of new insurance products, a focus on expenses and a high return on portfolio investment.

In the summer of 2000, Sampension needed to update its IT strategy to handle critical demands. The company needed a new, homogenous platform to support improved products with a faster time-to-market.

Sampension has a philosophy: 'I before E,' which means the infrastructure and back-end system must work before an e-solution can be implemented. This was difficult to achieve with the company's old mainframe solution.

"New regulations constantly challenge the pensions sector," says Lis Skovbjerg, executive director at Sampension. "To meet this challenge and maintain our competitiveness, we decided to replace our outdated IT systems with a modern and flexible new IT platform."

Sampension decided to replace its legacy systems with the Microsoft Windows operating system. It wanted a cost-effective solution that would be flexible enough to add new components. "In evaluating various suppliers, we considered whether their platforms, development tools and software solutions would support our business goals, " says CIO Hans-Henrik Mejl?e. "We also asked ourselves if they were progressive and thinking ahead. By picking Microsoft, we could foresee ongoing development for these products. Microsoft proved that support would be there."

Sampension had concluded that Microsoft's strategy would be able to support its future demands as early as 1997. "It is our impression that Microsoft technology is both flexible and durable," adds Mejl?e. "It is so mature that it can compete with the mainframe in terms of stability and performance."

The company's strategy is to run all applications on the Windows platform, keeping total cost of ownership down, and the total level of knowledge up. "If we had to stay on the mainframe platform, it would have been much more difficult and expensive to integrate back-end systems with the e-business solutions," comments Mejl?e.

Today, the administration of all Sampension's insurance, including investment systems, runs on Windows. The company has recently upgraded from Windows 2000 Professional to Windows XP Professional and from Microsoft Office 97 to Office Professional Enterprise Edition 2003. This ensures that Sampension will continue to improve productivity and collaboration over time.

Sampension's e-business solutions are also Windows-based. The e-solution gives policy-holders access to their personal data from the Web through Microsoft Internet Information Services (IIS) 5.0 with Microsoft ASP .NET. Microsoft SQL Server 2000 and Exchange 2000 Server provide the back-end support.

Mejl?e comments: "Financial companies like Sampension often have enormous databases. This makes big demands on the server solution. Sampension services, KP, and StK Pension among others. Their customers total around 220,000 of the entire customer portfolio. All are administered in one single database of 320 gigabytes ? one of the biggest databases in northern Europe. Microsoft SQL Server has no problems staying the course."

Besides its customer database, Sampension also has five terabytes of related customer information and documents. The company uses a cluster solution for the most important systems, ensuring high accessibility and availability. Network load balancing spreads the use equally over the servers. Windows 2000 Terminal Server gives employees access to line-of-business applications via laptops and mobile devices when working in the field.

Migration from the mainframe was achieved with virtually no disruption to ongoing operations. The new homogenous IT platform ran without problems, and employees did not notice the change except to note a significant improvement in performance and accessibility.

Sampension carefully monitored its fixed IT costs along with the business value being delivered. After the mainframe was retired, the costs began a significant decline while application complexity and business value continued to increase.

Sampension partnered with insurance specialist Edlund to write new Windows-based applications. The Edlund developers used the Visual Studio .NET 2003 development system beta version for a year prior to its release to manufacturing, enabling a quick, painless transition.

"We have a platform which is a lot faster than our competitors in this sector. No doubt about it," says Thomas J?hnk, technical director at Edlund. "We don't have to bother with memory leaks anymore. In Visual Studio .NET we have exception handling built right into the runtime. This gives us a very sound way to deal with errors ? across assembly boundaries, process boundaries, machine boundaries, and even language boundaries."

Performance of new applications was also improved. Mejl?e concludes: "Fewer employees are handling more customers with more complicated products and services. Sampension has a very competitive IT platform that supports the goals of cost-effectiveness and flexibility."