CHICAGO--Aon Corporation and Computer Sciences Corporation have agreed to negotiate the outsourcing of the majority of Aon's U.S. information technology (IT) infrastructure. The transition to CSC would begin in fall 2004, subject to completing a final contract.
The outsourcing and related consolidation of data centers and other functions, if completed as planned, are designed to produce an estimated $300 million in savings over seven years. CSC's management of this scope of service is expected to generate in excess of $600 million in revenue for CSC over the life of the agreement, which would cover Aon's U.S. insurance brokerage and consulting business units.
"CSC has a strong track record for large outsourcing contracts and they will help us achieve an IT outsourcing solution that offers benefits for Aon, our clients and shareholders," said Patrick G. Ryan, chairman and CEO of Aon Corporation. "CSC also shares Aon's commitment to a smooth transition for our IT professionals and the processes they manage."
Functional areas to be outsourced include data centers, telecommunications and data networks, desktop support, related help desk services and various IT support functions. These areas employ approximately 600 people across the United States, including contractors. Most of the affected employees are expected to transition to CSC. Aon will keep responsibility for IT strategy and leadership, architecture and application development and maintenance.
"The outsourcing and related financial benefits will occur in phases," said Chief Financial Officer David Bolger. "With CSC, we believe we've identified an approach that will enable us to maintain or improve client service and meet our administrative needs while contributing to improved overall profitability."
"We are delighted to have been selected to negotiate a definitive agreement with Aon," said CSC Chairman and Chief Executive Officer Van B. Honeycutt. "We look forward to applying our experience to help produce business results for this important market leader."
Source: Aon Corp.
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