Middleware technology is playing a key role in the continuing efforts to merge the operations of WellPoint Health Networks Inc. and Anthem Inc., Ron Ponder, CIO of the combined entity, said during a talk at Computerworld"s Premier 100 IT Leaders Conference here in Scottsdale, Arizona, Monday.

Indianapolis-based Anthem acquired Thousand Oaks, Calif.-based WellPoint in a controversial US$16.5 billion deal announced in October 2003 and finally approved last November. The combined entity is called WellPoint Inc. and is the largest health maintenance organization in the U.S., with more than $40 billion in revenue and 26 million patients in 13 states.

The merger allows the combined entity to save a potentially significant amount of money, Ponder said. The challenge is to take advantage of the economies of scale offered by the merger while retaining the ability to deliver localized services.

From an IT standpoint, the task involves the integration of several large claims systems across the two companies, he said.

WellPoint has initiated a large enterprise application integration project involving the use of a "very robust and expensive" middleware layer to pull information from across all of the legacy systems in the combined enterprise, Ponder said.

Rather than try to immediately consolidate massive systems across the two companies, the goal is to connect the existing systems and then stack the organization"s enterprise applications on top of this layer, Ponder said. "This allows us to manage our legacy systems at our pace as we merge and reduce the footprint of our systems," he said.

The approach is a bit more expensive than simply pulling out and replacing the older systems, but it also offers fewer chances for disruption, he said.

"We are not blowing up legacy systems. We may be spending more money, but it is better than recovering from a disaster" that could result from consolidation efforts, he said. "It"s a very workable strategy."