PacifiCare outsources IT to IBM

PacifiCare Health Systems has announced plans to outsource its IT operations to IBM and the consulting firm, Keane. The $1.2bn...

PacifiCare Health Systems has announced plans to outsource its IT operations to IBM and the consulting firm, Keane. The $1.2bn (£834,000) deal will save the company up to $400m (£278m) over 10 years.

US-based PacifiCare provides managed health care services for company health insurance plans and Medicare beneficiaries in eight US states and Guam. The IT outsourcing agreement is part of a larger cost-cutting programme that includes 1,300 redundancies, leaving PacifiCare with between 7,500 and 7,600 employees.

The agreement will account for the transfer of over 600 jobs to Keane and IBM, according to Dan Miller, a PacifiCare spokesman.

Larry Vale, a Keane spokesman, said his company would assume management and development of PacifiCare applications. Vale said between 250 and 275 PacifiCare IT staffers would be transferred to Keane as part of the agreement.

IBM will manage PacifiCare's IT infrastructure through its outsourcing contract, which is valued at more than $761m (£529m). Spokeswoman Nancy Kaplan said: "In a typical outsourcing contract, we take over data centre operations, manage the voice and data network and provide help desk services and PC support services."

Kaplan could not say how many PacifiCare IT jobs would be transferred to IBM.

PacifiCare said the restructuring will result in a fourth-quarter pre-tax charge of $60m (£41m).

Mark Anderson, chief executive of Anderson Consulting Group's Texas division said that while outsourced IT contracts can get "more work done for less money," he was sceptical of the savings promised by PacifiCare. "I've never seen an outsourcing agreement save a lot of money for IT departments," he said.

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