Life and pensions firm Friends Provident is paying IBM
£200m over 10 years to manage its IT and provide its infrastructure
services.
The finance firm expects to save £6m a year initially, with more
savings to come as the
outsourcing contract matures. The contract is part of Friends
Provident's overall plan to save£40m a year in operating costs.
The agreement includes all software, hardware and services. It
also provides an opportunity to use
IBM's cloud computing technology in the future.
Trevor Matthews, CEO of Friends Provident, said, "This is a big
step forward in achieving our targeted £40m of annual cost savings
by the end of 2009… We will gain access to the latest processing
power and the expertise to improve our service and technology
further. It sets us up very well for the future and is further
evidence of the forward progress we are making."
Phil Morris, European managing director at sourcing consultancy
Equaterra, said this deal is typical of deals finance firms are
planning as recession approaches. "They are making sure they
make the right decisions at the right time."
He said the
cloud computing aspect of the deal is interesting, providing an
appropriate level of commercial flexibility is included.