Montreal outsourcing giant CGI Wednesday solidified its position with two Desjardins Financial Corp. subsidiaries as it renewed five-year contracts worth a combined $70

million.

The company said it would continue to manage the mainframe operations for both Desjardins Financial Security and Desjardins Group General Insurance. Desjardins Financial Corp. sold a contract to provide these services to CGI about five years ago.

“”It’s mainly because specific expertise around operating a mainframe are very rare today,”” said Pierre Deschenes, senior executive vice-president of information technology with Desjardins Financial Security. “”We had to manage this operation 24/7. It was very difficult to hire for that obligation.””

CGI’s role includes the provision of disks, tapes, technical assistance centres, laser printing and production scheduling, incidence management, technology architecture, and service-level reporting. Deschenes said regular monthly reviews have been key to nurturing the relationship between the two firms. Richard Cloutier, vice-president of system operations and outsourcing contract management, Desjardins Group General Insurance, said it was also important to ensure all the elements of the service level agreement are well defined early on.

“”When you’ve got a good contract at first, usually it goes well,”” he said. “”We had a good one.””

Marinella Ermacora vice-president of consulting for Desjardins, is part of a dedicated team within CGI that focuses exclusively on the company and its subsidiaries. The team was created last summer but also draws upon the larger resources of an integrated technology management team that works in what she describes as a multi-client environment of 100 other customers.

“”We have very few resources that are dedicated, but to the customer it appears as such as a result of my team,”” she said.

Many companies in the financial and insurance sector have explored strategies to decentralize portions of their IT infrastructure, but Deschenes said Desjardins Financial Security likely won’t be one of them.

“”More and more, when you have a centralized operation, you’re going around IBM mainframes,”” he said. “”You have much better control over your operations, and also over the costs of the evolution. When you have servers, each time you have to change the operating systems, you have to change it along a lot of servers, and the costs become very high.””

Cloutier agreed. “”We still have a lot of legacy still running on the mainframe,”” he said. “”When we look at a project we look at whether we should do it on the mainframe or on a distributed platform, but I think we’ll be on the mainframe for a while.””

The success of the outsourcing relationship has allowed the subsidiaries to redirect their internal IT resources on other projects, Cloutier added, like the enhancement of e-commerce capabilities to Desjardins Group Insurance clients.

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