The UK's biggest insurance company, CGNU, is planning to outsource
the management of its voice and data networks to Cable &
Wireless in a seven-year £350m deal.
The contract, which is currently subject to a memorandum of
understanding, will see Cable & Wireless implement and manage
an IP-based network to 200 CGNU sites nationwide.
By adopting an all-IP network the company believes it can improve
services to customers while simultaneously reducing operating
costs.
Ian Butterworth, managing director for central services with CGNU,
said, "This is a merger-related activity and we wanted to integrate
the networks of the two companies on to one common telecoms
platform. At the same time, we are mindful that the future lies in
IP."
CGNU was formed out of the merger of Commercial General Union and
Norwich Union last year.
The central advantage of using an IP network is that it unifies
data and voice on one network infrastructure, whereas previously
separate networks were required for each. IP is also a highly
scalable technology and will allow next generation services such as
Voice over IP and multimedia contact centre applications to be
rolled out as required.
Cable & Wireless was chosen because it had the "best strategic
fit" with CGNU. Norwich Union and Cable & Wireless had a
longstanding relationship and it would be "far more straightforward
to extend this relationship, rather than to bringing in an entirely
new party", Butterworth said.
In February CGNU scrapped a seven-year £124m outsourcing contract
with IBM after only two years.
Robert Morgan, a consultant with outsourcing specialist Morgan
Chambers, said, "The biggest risk is in the management of the
contract, given CGNU's outsourcing history. Hopefully they will
have put in the preparation. The client needs to ensure there is a
management layer between them and the supplier to ensure this.
Cable & Wireless is a stable, world-class supplier, not looking
over its shoulder every three months to see who'll own it next."