Not to be outdone by EDS' $45 million outsourcing windfall at Caltex, IBM GSA has signed a massive seven-year contract with NRMA for virtually its entire IT infrastructure.
The deal will see GSA manage NRMA's S390 mainframe, 48 IBM RS/6000 and HP UX midrange systems and over 11,000 IBM and HP desktop environments. On the networking front, the deal includes 280 NT servers, a WAN covering 80 branches, six call centres, head office, numerous LANs and voice networks. The only aspect of its infrastructure that NRMA decided to maintain was application development and procurement.
IBM GSA fought off prestigious company in the selected tender process, competing with the likes of integrator giant CSC. "The major thing that won us the tender was our intellectual capital in the insurance industry," explained Ed Kilroy, CEO of IBM GSA. "We invest worldwide in data mining and process engineering which was of critical interest to NRMA," Kilroy added.
Also to IBM GSA's advantage was its status as a technology company. "We can continually deploy leading-edge technology because we have the size and scale and inner access to skills that NRMA could not replicate internally," Kilroy said.
IBM GSA will partner with Advantra, a Telstra/Lend Lease/IBM joint venture that IBM GSA "often team up with", according to Kilroy. Advantra will be responsible for the management of NRMA's wide area network and bring to the table extensive network skills.
Over the last 12 months, the insurance and motoring giant has been very active in expanding its IT infrastructure, having invested over $125 million in technology during that time. "A fair amount of that infrastructure is IBM technology, which we obviously know very well," Kilroy said.
However, GSA has not just been contracted to manage NRMA's existing infrastructure. The outsourcer has been retained to integrate the IT operations of NRMA's recent acquisitions, which include SGIO/SGIC and a joint venture with RACV.
NRMA's system will be moved in its entirety to an IBM GSA data centre and will involve approximately 85 NRMA IT staff crossing the floor to GSA.
"This is a pretty major logistical operation. We have to move staff, change software licences and basically make sure that everyone is happy and understands what is going on," Kilroy said. The entire process will be completed by June 30, three months since IBM GSA was awarded the contract in March.
Officials expect there to be no staff reductions. According to Kilroy, the outsourcing agreement will allow NRMA to focus on its core competencies.
"The NRMA has joined a growing number of organisations who have recognised the enormous benefits of outsourcing their end-to-end information services to allow management and staff to concentrate on increasing their core competitiveness," Kilroy said.