UK insurer Liverpool Victoria is pulling the plug on its IT outsourcing deal with EDS, a spokesperson from the services company said. The acknowledgement follows media reports that Liverpool Victoria was terminating the deal.
EDS currently has two outsourcing deals with Liverpool Victoria. It received a 13-year, 109m pound ($198m) deal in 2004 to provide policy administration and back-office services for the insurer, in what was basically an insurance BPO deal.
And back in 2000, EDS won 10-year, $300m deal with Liverpool Victoria to take over its entire infrastructure, plus software maintenance and development duties. The deal was extended another six years in 2004–at the time of the BPO is signing – for an additional $93m. This lengthened the IT contract to end around the same time as the new BPO deal.
According to EDS, Liverpool Victoria has decided to exercise a clause in the IT contract–not the BPO contact–to end the deal early. EDS expects the winding-down period to take 6 months, or until the end of March 2008. So far it is unknown whether Liverpool Victoria would outsource parts of its IT department to other vendors.
EDS said it was likely that they might hand over some non-core infrastructure areas such as telephony and data center to outsourcers, but that if EDS received any portion of this, the scope of the work would be much smaller.