CGI's AS/400 management expertise delivers value driven results

“CGI has had a positive impact on our business and we expect the financial value it has delivered to only increase over time. We look forward to an ongoing, productive relationship with CGI.”

Ron Groover, Vice President, CIO

In November 2003, CGI signed a 10-year, US$41.8 million IT outsourcing contract with Kanawha Insurance Company, one of the largest privately owned life insurance companies in the Southeast. Based in Lancaster, SC, Kanawha provides a wide range of life, health and Long Term Care insurance products. The contract calls for the delivery of full outsourcing services, including infrastructure management, data center services, as well as application maintenance and development.

The Challenge
Several IT challenges drove Kanawha to outsourcing. In business since 1958, the company was faced with the costly and complex task of upgrading aging AS/400 systems to improve its business performance and position itself for future growth. It was also looking to make its IT costs more predictable, improve its responsiveness to changing business conditions and take advantage of new technologies.

Unsure of whether to tackle these objectives in house or outsource, Kanawha hired an independent consultant to help it choose the best option. The consultant found CGI on the Web and contacted the company. In the summer of 2003, CGI was asked by Kanawha to conduct due diligence and respond to its Request for Information and Request for Proposal.

According to Kanawha Vice President and CIO Ron Groover, “we were impressed with CGI's extensive insurance background and AS/400 experience. Its AS/400 data center in Dallas, TX also enabled it to offer the most attractive price package. In addition, CGI had the offshore delivery capabilities that we needed to help reduce IT costs.” As a result, Kanawha selected CGI as its outsourcing partner.

The Strategy
The transition of Kanawha's AS/400 platform over to CGI began immediately in November 2003. The job primarily involved the transition of two major AS/400 systems used by Kanawha to handle policy and claims administration for its life and health insurance lines to CGI's Dallas data center. The data and logic in these two systems was migrated to a single, larger AS/400 system in Dallas. Kanawha also transitioned its Web-based policy and claims applications to Dallas.

Transition challenges centered around the merger of the systems and processes that were on two AS/400's into one more powerful box. Volumes of data had to be migrated and consolidated into the new system. CGI also encountered a major obstacle in integrating managed availability and data mapping software into the new system. The software would not properly execute on all of the system programs. However, CGI worked closely with the software vendors–Vision Solutions and DataMirror–to successfully troubleshoot and resolve the problem.

“Overall, CGI has done a good job in understanding our business and delivering quality services. Its customer focus has also been excellent,” notes Ron. “Return calls and e-mail responses are received quickly and issues are handled professionally and responsibly.”

The Technology

• The PC environment in which CGI is operating includes MSDN, VB 6.0, VBScript, Crystal Reports 6.0 and 8.5, Pegasus Image Express Pro, Rumba Objectx, Tiffmaker.dll, SQL 7.0 and SQL 2000, among numerous other leading-edge development languages, software and tools.
• The Internet environment includes MSDN, AspMail, AspUpload, HTML.dll, Javascript, Infragistics Net Advantage 2004, asp.NET, SQL 7.0 and SQL 2000.

The Results
The transition was completed on schedule and on budget and has delivered the bottom-line results Kanawha expected. By turning the control of its systems infrastructure over to CGI's Dallas data center, Kanawha has significantly improved its efficiency and productivity. The time required for its end-of-month and quarterly claims processing, for example, has been reduced by more than two thirds. Man-hours have also been dramatically reduced. The system operators third shift and weekend hours have been significantly been cut back. The availability of Kanawha's online systems has also been increased.

Kanawha is also reaping cost savings by taking advantage of CGI's offshore development center in Mumbai, India. A small team of consultants worked with Kanawha onsite for several weeks to gain an understanding of its business and system requirements and returned to India to work as part of a larger team focused on delivering application maintenance and application development services for Kanawha.

The success of the transition and CGI's overall performance in managing Kanawha's IT functions led Kanawha to expand its partnership with CGI in April 2004. The company amended the original contract to include an additional US$11 million worth of outsourcing with CGI for the delivery of document management services (DMS). Twenty additional CGI members joined the existing 41-member Kanawha project team and CGI also opened a new DMS processing center in South Carolina to better serve the company.

“CGI has had a positive impact on our business and we expect the financial value it has delivered to only increase over time,” says Ron. “We look forward to an ongoing, productive relationship with CGI.”