Prudential, insourcing
Prudential ratifies insourcing plan
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Insurance giant creates datacentre to bring mid-range systems in-house
Financial services provider Prudential is bringing part of its outsourced IT operations back in-house.Prudential UK recently completed a benchmarking exercise to determine the level of service and value for money offered by a Capgemini datacentre outsourcing deal (Computing, 31 March).
The insurance giant has now decided to create a datacentre to insource the management of its mid-range systems.
'We have enjoyed a strong working relationship with Capgemini over the past four years, but feel now is the right time to bring the management of our mid-range systems in-house,' said Prudential chief information officer John Worth.
'This demonstrates our confidence in managing our own IT arrangements.'
About 80 per cent of Prudential's datacentre requirements are outsourced to Capgemini in a five-year deal that ends in April 2006.
Prudential is now drawing up plans for the internal datacentre, which could be used to run global business applications.
About 90 people could be affected by the insourcing, but Worth says they will be protected by Tupe employment rules.
The firm is also negotiating a two-year contract extension with Capgemini for its IBM mainframe. 'We will continue to see benefits from working together,' said Worth.
Richard Punt, head of strategy practice at consultant Deloitte, says more firms are considering their sourcing options.
'Many companies are realising they should not have done deals in the first place, and we will see companies insourcing IT on a regular basis,' he said.
But Martyn Hart, chairman of the National Outsourcing Association, says there are still benefits associated with outsourcing.
'There is not a very big trend towards insourcing,' said Hart. 'Outsourcing works because of economies of scale.'
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