Laurentian Bank of Canada announced Monday that it will soon be outsourcing most of its information technology services to Montreal-based IT services firm CGI Group Inc.
V.P. Pham, vice-president of IT for Laurentian, said by outsourcing its IT services, the bank will ensure its technology infrastructure stays in qualified hands.
“We have a high turnover ratio,” in IT, said V.P. Pham. “We need someone with strong expertise and a strong background to develop the system and increase time-to-market of financial solutions.”
The 10-year agreement between Montreal-based Laurentian and CGI is worth approximately $300 million. Under its terms, by mid-June CGI will handle an array of services for the bank, including project development, application maintenance and evolution, operations support, network management, technology deployment, technical support and the bank’s automated banking machine network.
One hundred and fifty of the bank’s 180 IT employees will move over to CGI. The remaining 30 will remain in-house and oversee Laurentian’s systems architecture, technological orientations, information security and service agreement management.
“There are no layoffs whatsoever,” Pham said.
Outsourcing is not new territory for Laurentian. IBM currently handles the bank’s data processing and Sprint Canada is responsible for Laurentian’s telecommunications network.
Pham said the outsourcing of IT services is not a money-saving initiative, but rather one designed to stem the frequent departures of technical staff. He said CGI is better equipped to retain top personnel.
“It’s not a question of cost here.” Pham said. “[At CGI] the IT professionals will collaborate with 13,000 CGI employees that all do the same thing. For the employee, it’s a much better environment than the environment of the bank.”
Jean-Francois Bissonnette, vice-president of CGI’s financial sector, said because CGI is an IT firm with 4,000 different clients, it offers IT professionals a dynamic work environment that financial services companies can not match.
“They try to focus on their core business — banking for bankers, insurance for insurers,” Bissonnette said. “IT people like to develop hot projects. We have more opportunities for [IT professionals] than one bank could offer.”
These opportunities, Bissonnette said, help explain the growing number of financial services companies outsourcing their IT services to CGI. The Laurentian agreement announced Monday is just the latest in a series of multi-million dollar outsourcing contracts CGI has signed with such organizations this year.
In January, the firm announced an IT outsourcing deal with Toronto-based-Sun Life Financial worth $119 million over seven years. In February, CGI inked a $22 million contract to implement its Web-enabled insurance administration system for Swedish insurer Skadeforsakring AB. And CGI opened the month of May by signing a 10-year, $1.2 billion IT agreement with Montreal’s Mouvement des caisses Desjardins.
This summer, CGI is expected to complete a purchase of Clearwater, Fla.-based technology solutions provider IMRglobal, which comes with its own stable of financial industry clients. Bissonnette said once the sale is completed, the financial services industry will account for 35 per cent of CGI’s client base.