Wednesday, June 11, 2008

How outsourcing saved Zurich's failing IT

Source : Click

one of the world's largest insurers, has revealed how outsourcing helped turn around its failing IT department and a $3.4bn loss.

In 2003 Zurich Financial Service's sprawling IT department consisted of more than 7,500 employees and 30 CIOs separately servicing different parts of the business. Combined with that Zurich had posted a record loss of $3.4bn the year before.

Zurich CIO Michael Paravicini said that there was no global IT strategy and that its outdated infrastructure relied on too many data centres and incompatible software platforms, with 30 different claim systems in place.

Paravicini said: "Our operations were ineffective and we did not function as a group, we were more like a portfolio of hundreds of independent businesses."

Today the Swiss insurer outsources nearly half of its IT work, some managed application services are run by Accenture, CSC and Wipro, its network and telephony services by Orange Business Services (OBS) and managed desktop services by IBM.