Financial services group Friends Provident has extended its use of Indian IT outsourcing supplier Wipro, handing the firm two more projects after its success developing a Friends Provident web portal for the processing of pensions applications by independent financial advisers.
Friends Provident, whose 2005 preliminary figures were out last week, has been working with Wipro since 2001. It uses the firm to give it the flexibility to deal with peaks in IT demand, but it is only recently that Friends Provident has felt ready to move most of the management of some IT projects offshore.
Mike Shapland, Friends Provident's head of IT solutions delivery, said the company's relationship with the supplier had matured in the past year, enabling it to "play to Wipro's strengths".
He said that, in the past, Friends Provident has used Wipro either to supply workers onshore in the UK to fill gaps in its project teams, or to undertake offshore software development to tight specifications set by the IT department. But Shapland said that it had becoming increasingly clear that such an approach was not making the most of the resources available.
"Handing an outsourcer more control of an IT project is a big step to take, and it was not something we were comfortable with at first. But the success of the web portal project, which was a pilot development project for Wipro, has shown how effectively the relationship has moved on."
In that project, Shapland said Friends Provident had been careful to maintain close communications between the two firms, with some Friends Provident staff working under Wipro's project management. "I would say it was 80% Wipro-resourced, leaning on Friends Provident expertise where necessary."
And like any in-house project, Shapland said that Wipro had to get its design approved to meet Friends Provident's architectural standards, as well as getting sign-off at various points along the way. "Having said all that, the build stage was largely completed offshore," he added.
IT projects at Friends Provident commonly last between 12 and 15 months. The company has handed Wipro management control for two more projects, as well as running key subsidiary strands of several other in-house IT programmes.
"Our first responsibility is of course to in-house people and managing their workloads, but there is still plenty for Wipro to get involved with," said Shapland.
"Giving work to an outsourcer also requires the right sort of projects. So far, Wipro has been used for traditional mainframe-type projects. We are very aware of the need not to lose in-house expertise in certain key areas where we need to keep developing our capabilities.
"That means that leading-edge e-commerce-type projects will always remain in-house, if only to safeguard our capabilities."
Shapland said Friends Provident's use of technology was a key differentiator in a crowded and competitive marketplace, and it was important not to lose control of that.
But he said there had been few problems with the shift towards working more closely with an offshore outsourcing supplier and getting more from its talent pool.
"Wipro now has a huge reserve of talent and vast resources, so there is a clear advantage to be gained from tapping into that. Of course, we still want to keep a degree of control by building in checkpoints along the way, but that is just good practice."
This was first published in March 2006