Reducing costs of IT maintenance
One of the world's largest reinsurance players has a global presence and conducts business with its various subsidiaries in North America, London, and international markets. Its main areas of concern include property and casualty reinsurance, and life and health reinsurance.
The company wanted to reduce costs relating to IT maintenance through consolidation, rationalization, and sourcing (CRS) activities. This would free funds as well as personnel to drive more strategic business initiatives. There was a need to identify and drive near-term initiatives that had a clear business value and could generate interest and commitment for the CRS activities.
Infosys faced the following challenges while creating the solution:
- Infosys had to take charge of various activities so as to free the client's critical resources to handle strategic activities. The handover had to be problem-proof in order to ensure that the client's resources were not tied down by operational activities.
- There were various applications and Infosys had to determine which would be most suitable for offshoring. This required a highly detailed analysis of existing applications, leading to a full understanding of their features and functions.
- Once the applications were graded as per suitability for offshoring, they needed to be broken down into logical units to facilitate a phased approach. Also, the applications needed to be re-evaluated to get a fuller comprehension of capabilities.
- Infosys also had to do a cost-benefit analysis to determine the savings possible due to outsourcing over a three-year period so as to procure the maximum possible benefit for the client.
Infosys leveraged its Global Delivery Model to study the 51 applications used by the client. In the initial study, the Infosys portfolio analysis team studied the various applications and graded them in three categories, based on high suitability, medium suitability, and low suitability for offshoring.
In the next phase, the systems appreciation team conducted an independent study of the applications from a different perspective to determine the logical grouping of applications. This was to enable the smoother transitioning of applications, to be performed over multiple phases.
The team created a 3x3 grid, using inputs that were generated from both the above exercises. The quantitative and qualitative analysis helped the team to identify the categories of applications that would benefit from offshoring.
Much of the complexity of the task was due to the extremely high-end nature of the client's systems, which were required to handle its huge scope of activities. The Infosys team had to rely on its deep domain expertise in diverse technologies like Information Management System (IMS), Telon (an application generator that generates COBOL and PL/I code for IBM mainframes and COBOL code for AS/400s), DB2, Cobol, Weblogic, etc., to fulfill the client's requirements.
The benefits that the client obtained included:
- The unique 3x3 matrix generated by Infosys helped the client to get a clear picture about all its applications. This bird's-eye view model enabled it to see the benefits of CRS activities.
- Critical people and funds were freed up to handle strategic activities helping the client's overall business operations.
- The cost-benefit analysis, system appreciation, and transitioning phases, in tandem with the offshoring application grouping, helped the client to redefine its operational activities.