Royal & SunAlliance UK has entered into 10-year outsourcing contract with IBM covering the management and development of the insurer's IT infrastructure, including mainframe, mid-range and desk top computing services.
The new relationship with IBM Global Services covers enhanced support for R&SA's existing operations and the development of new lines of business in the future. The deal is expected to save the UK insurer £5 million over the life-time of the contract.
As part of the agreement, the two parties says they will jointly invest in the creation of an Innovation and Transformation Centre (ITC) for the application of new technologies. IBM will also develop R&SA's existing computer centre at Lennox Wood near Horsham (West Sussex) to include an e-business hosting facility, from which it will manage the Web hosting needs of R&SA as well as other IBM business customers.
Commenting on the new alliance, Paul Spencer, R&SA's UK chief executive, says: "Our partnership with IBM will also ensure that we are able to fully harness the potential of the Internet and other emerging technologies both now, as with the highly successful launch of MORE TH>N, our direct operation, and in the future, creating a platform from which to develop products to meet the ongoing needs and service expectations of our customers."
In early 2002, IBM will begin a two-year technology consolidation programme for the UK insurer, including the standardisation of desktop computing facilities across all R&SA sites in the UK. During this period, 285 Royal & SunAlliance IT employees, based at a number of key R&SA sites including Liverpool, Horsham, Bristol and Halifax, will transfer to IBM under TUPE (Transfer of Undertakings Protection of Employment) regulations, protecting their existing employment terms and conditions.
R&SA says it consulted fully with its unions at all stages during the development of the alliance and there are no planned redundancies as a result of this move. As part of the deal, within the next 18 months IBM will establish a multi-client service centre in Liverpool.
Royal & SunAlliance UK's average annual IT spend is around £50 million and it is anticipated that approximately 10% savings will be achieved over the course of the 10 year agreement.