Friends Provident Signs 10-year, £200 Million Contract with IBM

Friends Provident (London) has contracted for IBM to manage its IT requirements and deliver its future infrastructure services in a 10-year deal worth £200 million. The deal is expected to generate potential annual cost savings for Friends Provident initially of around £6 million a year, which are expected to increase over the term of the contract.

Friends Provident outlined in its strategic review, in January 2008, its aim to make annual savings of £40m, over a two-year period, from its operating cost base and to consider alternative sourcing strategies. The contract with IBM will assist in achieving further significant cost reductions by, among other things, increasing standardization, implementing rigorous processes, using shared infrastructure and offshore resources.

The agreement includes every aspect of the technology infrastructure including software, hardware and services. It also provides an opportunity for all hardware to be refreshed and in future the ability to provide mainframe capacity on demand through IBM's cloud computing technology.

Friends Provident's staff is working closely with IBM to plan the transition process and transfer of responsibility for delivery of IT services, according to the carrier. This process will be completed by March 2009 and will involve the transfer of around 200 employees to IBM and its partners.

Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio