Financial services company Friends Provident has turned to India to
help it keep pace with a growing volume of IT projects following
its flotation last month.
The company, which specialises in life assurance, has hired Indian
software firm Wipro to rewrite systems to reflect the company's
demutualised status and to begin work on a raft of new IT
projects.
The deal, which will add 40 programmers and developers - mostly
based in India - to Friends Provident's 200-strong IT department,
has allowed the company to increase its IT capability without the
expense and difficulty of recruiting new staff.
The partnership will give Friends Provident the flexibility to take
on or lay off extra Wipro programmers to match the volume of
work.
"Recruitment is not easy in any of the locations we are in,
particularly if we want to ramp up quickly. Taking on your own
staff is costly and quite difficult to do," said David Cooke,
Friends Provident's IT development manager.
According to Cooke, the deal has also helped Friends Provident's IT
department to improve its approach to project management and
quality control. "Wipro has a very rigorous quality process. It
forces us to be more disciplined. You can't keep chopping and
changing what you are doing. You need to be slightly more formal,"
he explained.
Friends Provident has hired CMG Admiral, to carry out the business
and systems analysis for the outsourced projects. CMG has provided
10 business analysts.
Initially Wipro, which is supplying Java, Powerbuilder and HPS
programmers, will develop systems for stakeholder pensions and work
on extensions to Friends Provident's Web site.
It is also reprogramming IT systems to implement the Association of
British Insurers' Raising Standards programme, which aims to
simplify insurance documentation.
The main challenges in working with Indian programmers are
cultural, said Cooke. Indians' tend to be more deferential to their
managers and are less likely to question their decisions, he
explained.
"The other side of it, is that they are extremely hard working,
very intelligent and get on with the job. They all have first or
second-class degrees and are highly motivated," he added.
Friends Provident, which has a strong record in IT development,
manages its life and pensions products on an IBM mainframe running
the IMS operating system. Applications are written in the PL1
programming language.
Providers use Web for stakeholder pensions
The
Association of British Insurers has predicted that up to 500,000
people on moderate incomes may take up stakeholder pensions before
next April.
Most pension providers have used the Web to cut the administration
costs and avoid high overheads when delivering stakeholder
packages. Under government regulations pension companies can only
charge customers a maximum of 1% of the stakeholder funds' total
value.
Web-enabled pensions allow monthly contributions from an employer
to be sent automatically to the pension provider's extranet site.