Friends Provident, a UK-based life and pensions group, has appointed IBM to manage its IT requirements and meet its future infrastructure services for 10 years, under a GBP200m deal.
Friends expects to post cost savings of around GBP6m a year initially and more subsequently.
Founded in 1832 for the uplift of Quaker families, Friends now operates in the UK protection and corporate pensions markets. In January this year, Friends aimed to make savings of GBP40m, over a two-year period, from its operating cost base and to consider alternative sourcing strategies.
The contract with IBM is expected to assist the company in achieving significant cost reductions by increasing standardisation, implementing rigorous processes, using shared infrastructure and offshore resources.
The agreement includes 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.
Trevor Matthews, CEO of Friends Provident, said: This is a big step forward in achieving our targeted GBP40m of annual cost savings by the end of 2009. The cost savings we will realize under this contract will help to make Friends Provident a leaner, fitter and more efficient business without compromising the market leading levels of service we are renowned for.”
Bruce Ross, general manager for IBM Global Technology Services, UK and Ireland, said: Consolidating the whole spectrum of technologies from hardware, software and services into a single service-based contract will allow us to enhance integration and improve flexibility across the enterprise in order to support Friends Provident’s evolving business requirements.
IBM has said that the deal would result in the company recording a signing of approximately GBP150m in the fourth quarter of 2008.
