Insurance group The Co-operators has turned over management of its e-mail systems to IBM Canada in a five-year, $4-million agreement.

IBM will charge Co-operators on a per-user

basis, which is expected to save the company about 40 per cent off the current costs of managing e-mail in-house.

The cost per user will go down as more employees are added to the system, said Brent Cameron, application management services executive with IBM Canada. He added that there will be different levels of e-mail usage available to employees and IBM will charge according.

A “power user,” for example, might require an e-mail file of several gigabytes, whereas other users may only require a file in the megabyte range.

“As their mail file grows, there’s an incremental cost on the mail file growth beyond a flat bandwidth point. We’re not into nickel-and-diming them for each individual e-mail. As long as the end users manage their mail file size, they don’t have any incremental (charges),” he said.

Users that are close to exceeding their e-mail capacity will receive and reminder to manage their account before they are pushed into a different price bracket.

Co-operators, based in Guelph, Ont., has been using Lotus Notes for its e-mail and will continue with that client under the new arrangement with IBM. The transition for employees should be virtually invisible, said the insurance company’s CIO, Vivian Fong. Ease of transition was a major factor when choosing a vendor to handle the contract, she said.

“We should regard e-mail like the telephone. It should always be there, it should always work,” she said.

IBM’s agreement with the Co-operators isn’t based on server uptime like other contracts, said Cameron. With that hosting model, “there’s no real guarantee on the end user’s ability to get e-mail out of the system. On this particular implementation, what we’re doing is we’re actually measuring the client’s ability to get their e-mail within certain response times,” he said.

The outsourcing of e-mail is a relatively new phenomenon, particularly in Canada, said IDC Canada Ltd. business outsourcing analyst Jim Westcott. But the apparent advantages may attract more customers.

“I think it’s definitely something people will consider (using). It’s really a non-core business function and I think that’s one of the reasons (Co-operators) went ahead and did this deal. IBM’s got an army of people who know Lotus Notes backwards and forwards,” he said.

Two years ago, a Co-operators company, Co-operators Life Insurance Co., made headlines when a disk drive containing customer information went missing from a data centre managed by ISM Canada, an IBM subsidiary based in Regina.

“In that instance, there was a former employee that had kind of misappropriated the hardware. The police investigated and determined that nothing actually happened to the data,” said Cameron.

Fong said she couldn’t comment on the incident, she isn’t responsible for the company’s life insurance business. She said it had no bearing on the e-mail contract with IBM.

“From my perspective, in going into the negotiation with IBM (for the e-mail contract), it is to look into it like any outsourcing contract — to make sure that we have the mechanism in place (and) security is being handled correctly.”

IBM’s security policies were included in its proposal for the e-mail contract and only required some small adjustments to meet the Co-operators’ criteria, she said.

Comment: info@itbusiness.ca

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