When it’s time to renegotiate its latest IT contract, a large insurance firm and an outsourcer will be celebrating their silver anniversary.
Financial Services Tuesday signed a five-year, $25 million outsourcing deal. According to John Bennett, CGI vice-president customer relationship management, the firm will host Industrial Alliance’s data in its data centre and be responsible for hardware and software related to the mainframe and AS/400. He adds it will also provide all the personnel necessary, including analysts, technical support, operations and production staff. The Montreal-based outsourcer will not be hiring or firing any staff to do the job.
Jacques Martin, Alliance’s senior IT director, said he is pleased to see the 20-year-old relationship carry on.
“”They came out with an offer that was very interesting for us, so we decided to stop the current deal and sign for another five years,”” Martin says.
There are two distinct advantages to the deal, according to Martin. While he wouldn’t divulge any numbers, Martin says the outsourcing model offers the Quebec City-headquartered company significant savings. The other feature is access to technical expertise. “”It’s easier to have access to up-to-date technologies through CGI than we would be able to do it by ourselves,”” Martin says.
The final price tag on the contract could change significantly between now and 2007. Bennett says a base sum is spread across the life of the deal. From there, the price can either climb or drop depending on annual re-negotiation windows.
“”The client might require additional services, and what we do is as those services get added we review those on an annual basis. In other words, we would benchmark against the industry to make sure we’re in line to remain competitive. So there are adjustments that would be done on an annual basis to keep us in line with the industry,”” Bennett says.
Two of the services Bennett says it could add are policy printing and document technology. On the hardware side, nothing new will be added right away, but the deal calls for CGI to “”bring new technology to the table and there are refresh agreements in the contract,”” he says.
Bennett says he is confident it can continue to serve Industrial Alliance well, thanks to its familiarity with the client, industry experience (41 per cent of total revenue comes from financial services) and an annual performance review. Martin says CGI scored “”close, really close, to an excellent card”” the last time.