Mainframe outsourcing supports business success

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Mainframe outsourcing
supports business success
CASE STUDY
CHALLENGES
• Improve cost structure
• Integrate acquisitions
• Enable online self-service
educe the risk
• R
of mainframe upgrades.
SOLUTIONS
arness global scale in software
• H
management
• Leverage global software factory
• Create development environment
evelop web services interface
• D
with mainframe
• E ngage mainframe design
engineering staff.
RESULTS
• S oftware savings from
the CSC sysplex
• Low risk, rapid migration
aintained software currency
• M
Systems integration in three months
• Online product sales
Allianz is growing at more than twice the market rate, and was awarded
Australia’s ‘Best General Insurer’ in 2006 and 20071. Its competitive edge and
rapid growth is supported by highly efficient mainframe resources managed
by strategic partner CSC.
In Australia’s highly aggressive general insurance
market, Allianz has been a stand out success story.
Allianz is now Australia’s fourth largest insurance
company and a strategically important subsidiary of its
European parent, Allianz SE, the 2007 ‘European
Insurer of the Year’. In a market expanding at only 2%
per year, annual growth rates of 7% and 5% in 2005
and 2006, respectively, earned Allianz a AA- rating
from Standard & Poor’s in 2007.
The insurer’s success rests on its ability to deliver value
for money – as evidenced by its 2007 National Five Star
Rating for car insurance – and respond effectively to
changes in consumer demand. Underpinning its service
culture and competitive products is a highly cost efficient
mainframe environment, managed for over ten years in
a strategic partnership with CSC Australia.
Driving down software costs
Delivering value for money to its clients requires
Allianz to streamline costs throughout the business.
One of its areas of cost advantage is in mainframe
software, due to CSC running all of its client software at
the same version level in a well managed environment.
The volume discounts this global software management
generates provides significant savings – reducing the
cost of software to Allianz by as much as 50% for
some products.
Allianz also benefits from CSC’s global software
factory, which rapidly turns around both product
testing and customisation to the Allianz environment.
In addition, CSC’s large pool of mainframe expertise
cushions Allianz from the cost of keeping current
with the constant cycle of operating system upgrades,
ensuring migrations are smooth and risk-free.
This resource has become particularly important in the
current labour market, which has a critical shortage
of mainframe engineers. The career opportunities
offered by CSC’s size and broad client base help to
attract and retain both graduates and experienced
professionals. CSC’s above-market retention rate
gives Allianz confidence that its mainframe capability
will continue to be upgraded and aligned with business
growth as cost efficiently and effectively as possible.
• M
ainframe capacity aligned with
business growth
• Service exceeds expectations.
1
Best General Insurer 2006 and 2007, Australian Banking & Finance Insurance Awards.
Mainframe outsourcing
supports business success
Providing excellent career opportunities
for transitioned staff
“Having been in house as an operations analyst for
eight and a half years, I was very disheartened when
they decided to outsource IT and concerned that,
once I’d transferred my knowledge to the provider,
there would no longer be a role for me. That was
ten years ago. I’m still with CSC, and Allianz is still
one of my accounts. CSC took me straight back after
maternity leave. They value my skills and offer many
opportunities for a challenging and varied career.”
Sophie Ioannidis
Senior Operations Analyst and Team Leader
CSC Australia
Building a development environment
to help integrate acquisitions
In 2001, Allianz bought out the failing HIH’s interest in
a joint venture, requiring HIH systems to be integrated
with Allianz’s infrastructure – a move that would
increase mainframe capacity by 50%.
Prior to outsourcing, Allianz had run development
projects side by side with its live systems on one
mainframe – a risky undertaking with a single point of
failure. Moreover, this particular development project
required so much additional capacity it would have
required Allianz to purchase another mainframe.
By contrast, the solution under CSC’s managed mainframe
service was low-risk and provided the additional capacity at
only incremental cost. While the rapid capacity growth was
50% of Allianz’s total processing power, it represented less
than 1% of CSC’s overall managed environment and could
be provided on demand.
About CSC
Computer Sciences Corporation is a leading global
information technology (IT) services company. CSC’s
mission is to provide customers in industry and
government with solutions crafted to meet their specific
challenges and enable them to profit from the advanced
use of technology.
With approximately 87,000 employees, CSC provides
innovative solutions for customers around the world by
applying leading technologies and CSC’s own advanced
capabilities. These include systems design and integration;
IT and business process outsourcing; applications software
development; Web and application hosting; and
management consulting. Headquartered in El Segundo,
Calif., CSC reported revenue of $14.9 billion for the 12
months ended March 30, 2007. For more information,
visit the company’s web site at www.csc.com
© 2007 Computer Sciences Corporation. All rights reserved.
Computer Sciences Corporation Designed and produced by
CSC’s Australia.
To reduce risk, CSC built a separate mainframe with a
logical partition in which to develop the new solution,
converting the HIH systems in just three months. Rather
than dismantling the development environment, Allianz
elected to retain it, allowing the insurer to develop new
products without the risk of damaging its revenuegenerating products running on the main system.
Supporting online product sales
As consumers became comfortable with buying financial
products online and Allianz moved to sell insurance on the
web, it needed an interface to all product systems. Rather
than setting up web sales through small servers, it elected
to create a web interface to its mainframe, where the
products resided – taking advantage of the mainframe’s
robust capacity, scalability and monitoring capabilities.
Another advantage was the energy-efficiency of
the solution, since mainframes deliver much higher
utilisation rates than servers. This was important to
Allianz, which in 2007 was recognized as the most
sustainable general insurer in the world by the Dow
Jones Sustainability Index, and honoured as ‘Best in
Class’ for its approach to greenhouse gas emissions
disclosure by the Carbon Disclosure Project (CDP),
featuring in the CDP Leadership Index for the second
year running.
To support this green strategy, CSC created a web
interface that is allowing Allianz to build a front end to
products that reside directly on the mainframe. This
complex technology change is being achieved through
a partnership approach, as CSC and Allianz work
together in new territory.
The resulting online management processing solution
is already supporting sales of Allianz’s breakthrough life
insurance product. In a market dominated by advisors
and complex products, 2007 saw Allianz launch a simple
alternative – up to 30% cheaper than other online life
insurance. Thanks to CSC’s web interface, the new
product can be purchased online in just 12 minutes.
Bringing in specialists to change mainframe
architecture
Operational failure can be catastrophic in any industry,
but in insurance it is also one of the risk factors
considered by the Australian Prudential Regulation
Authority’s rating system. Thus, when Allianz needed to
change its mainframe architecture in March 2006, it was
vital that CSC took every step possible to mitigate risk.
In response, CSC engaged proven specialists in technical
migrations – a team of mainframe design engineers
drawn from CSC’s global ranks – to plan and oversee
the project. Due to this team’s deep experience and
niche expertise, the project met every milestone,
seamlessly changing from one architecture to another
without business interruption.
Exceeding expectations
None of these achievements would have been possible
without CSC’s consistently strong service delivery
performance, which met 99% of its SLAs over the 24
months to March 2007. This included online response
times, application availability and mainframe availability
and reliability.
“CSC continues to be proactive and innovative
without compromising day-to-day operations.”
Steve Coles
CIO, Allianz
January 2007
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