By Andy McCue, 15 September 2006 14:40
NEWS
Norwich Union is outsourcing 500 IT jobs - most of them to India - as part of company-wide plans to save ÂŁ250m per year by 2008.
The IT roles will be outsourced to Norwich Union's main Indian offshore partners, Tata Consultancy Services (TCS) and Wipro, with some work also going to CSC. Norwich Union currently has around 1,400 IT jobs outsourced to India since it started doing so in 2004.
The insurance giant is also cutting 200 IT contractors who currently work on short-term contracts as part of a total of 4,000 job cuts across the finance, HR and marketing functions of the company.
Norwich Union's retained UK in-house IT headcount will fall from 3,000 to 2,500 as a result of the cuts which, after the standard consultation period, are expected to be complete by the second or third quarter next year.
Alex Robinson, CIO at Norwich Union, told silicon.com the move is a balance between lowering costs and retaining core IT skills in-house.
He said: "This isn't the outsourcing of the whole IT function. The in-house IT function is core to our business and working alongside the IT workforce at our global partners. It is a balance between the two. The challenge we have got is that insurance is a commodity market. We have to keep our cost base highly competitive."
Whereas Norwich Union's existing offshore outsourcing to date has focused mainly on application maintenance and development, Robinson said the latest roles to be sent to India will cover a wider range of roles across the whole spectrum of IT activity including IT architecture and design.
silicon.com Financial Services
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Robinson added that global sourcing of skills and resources will continue to be an important trend for IT departments.
He said: "I expect IT in a big business like ours to be a global function. Geography is becoming increasingly irrelevant."
Finance trade union Amicus has reacted angrily to the cuts calling them "brutal".
Comments
There are 18 comments. Join the discussion
1. anonymous
Anyone who has dealt with Norwich Union's customer facing staff based in India will know that this move has been a complete failure. I, and a number of colleagues, have taken our business elsewhere as a result of the resulting poor service.
2. Anthony Hunt
They've lost my custom.
Maybe they'll sell some insurance to India?
3. Brian Burkill
Add Mental Note when renewing car insurance.
DONT USE NORWICH UNION.
Until they realise
UK people for UK jobs
4. Richard Barker
Norwich Union is doing the right thing to remain competitive. 'The world is becoming flat' and the other British companies will realise soon.
5. anonymous
I will only deal with companies loyal to the UK and employ people here so no more business for Norwich Union.
6. Lever
Maybe we should start outsourcing some of our "IT" Directors... That'd save some money aswell as a space in the car park...
Quote me out of a job, Mumbai Union.
7. anonymous
Since I never ring call centres and get a perfectly adequate service through the internet for everything I buy. These jobs wont last long anyway 3- 5 years tops.
8. Mark Walsh
When will these companys realise that this is a false economy, these projects just don't work.
We - the public - will not tolerate shoddy cost sutting exercises at our expense and the expense of jobs in britain.
I have NEVER encountered any upside in the experience of dealing with a company that has outsourced in such a manner, the experience has ALWAYS been negative, and in most cases had me in dispair and swearing never to use them for the rest of my life, and I have felt it my duty to convince my friends and collegues to do the same.
I tend to see such actions these days as desperate attempts by company execs to justify that they are actually doing some work, give it 3 years and they will change it back again futher adding to the illusion, getting more 'pats on the back' and cashing in an even bigger bonus for essentially doing what most of us would call 'failing miserably'. However our opinions fall on deaf ears.
Spread the word and get your friends and family to vote with their feet. Hitting profits is the ONLY thing they understand.
9. Mark Walsh
WELL HOW STRANGE that the only comment to be in favour of the outsourcing is from
RICHARD BARKER
an
IT Dorector
from
NORWICH
Richard might change his mind when his company outsources his job and he finds himself in the jobcentre queue with the other poor victims of these shambolic, self-centred unjustifiable projects.
10. Joe Public
'Doing the right thing'? For who? If it's for the shareholders, yes maybe, but remaining 'competitive' at the risk of pi**ing of existing and potential customers is very shortsighted. No-one will ever convince me that offshoring UK jobs is good for the economy. It might stuff some extra wads it the fat cats' wallets, but has nothing positive to offer you or me in the long term.
11. anonymous
Fine Norwich Union, Your policy holders also have the option of moving accounts. Currently I have a number of policies with your organisation; they are going to be transferred. Same way as other accounts that I have with so called British organisations –they go out of the country with MY DATA, then I take my business away. I pay more than £2000 a year to your company, nolonger.
12. anonymous
Fine Norwich Union, Your policy holders also have the option of moving accounts. Currently I have a number of policies with your organisation; they are going to be transferred. Same way as other accounts that I have with so called British organisations –they go out of the country with MY DATA, then I take my business away. I pay more than £2000 a year to your company, nolonger.
13. Chris Stevens
Note for Diary - change away from Norwich Union insurance as they do not support the UK public and prefer to import services.
14. Andy Wallington
To anonymous -
"Since I never ring call centres and get a perfectly adequate service through the internet for everything I buy. "
Have you forgotten that this isn't just buying a policy. These will be the people trying to work from a script when you're trying to explain the complexities of your car accident. I'd rather deal with someone who knows what you're talking about and that's why I moved my business from Norwich Union.
15. anonymous
No-one is saying challenges dont exist with offshoring but companies are working hard to overcome these to improve the customer experience.
Companies do need to operate in a socially responsible way but ultimately must balance this with the wishes of their shareholders, if they want to remain in business. Insurance specifically is a very competitive market at present.
I can understand that the uk jobs for uk people banner waving is understandable. However we do live in a global economy and sourcing decisions occur at a global level. Whilst different labour markets around the world have different skill and cost levels companies will source resource based on these criteria, not location.
Over time people will have to accept this and as a nation I hope we will find a way to stop just complaining and start doing something to make ourselves more competitive globally. Thats the only way jobs will come back.
At present India has a very competitive education system. If you dont hit very high standards someone else will and you lose. This mix of competition and sheer numbers means high intelligence for low cost. Simple.
16. Paul
How does one find Companies that don't offshore any services these days?
17. anonymous
Coming in late, as I do, I get to read all the other comments first. I have never seen a topic where the comments have been so overwhelmingly biased either for or against - in this case against!
I am not racist, I do not support keeping jobs in the UK for the sake of it and all I want from any organisation with which I deal is SERVICE! I don't care wher it comes from provided it is efficient.
Exporting the work to India, the Phillipines, Timbuktu or wherever may not even reduce the company's costs and the vastly increased call times certainly don't enamour the customer. I was told recently by a BT call centre agent in India that holding for thirty minutes didn't matter because I wasn't paying for the call! I would happily pay for the call if I could get an immediate answer and an efficient operative who really knew what he/she was doing and who wasn't hidebound by a script that will never cater for all eventualities.
No, Norwich Union, you have got this badly wrong like so many other penny- pinching companies looking only at their balance sheets and not at Customer Service. The cost of this move to your customers will have them voting with their feet in their thousands - there's a dozen or more such comments here already and no doubt thousnds more of your like-minded, soon to be ex-, customers of yours out there.
As a customer and a shareholder, Good Night!
18. Catherine Burchmore
Norwich Union Ins.. NEVER AGAIN!!!
What dreadful service.
My husband was involved in a vehicle accident - no fault of his own.
We have had to make many phone calls re this and speaking to their Indian Call centre has been totally frustrating - we have to repeat information several times and you never get a decent resolution regarding any problems - then they have the nerve to ask you if there is anything else they can help you with and have a nice day! when you're clearly having a nightmare of a day made 10 times worse speaking to them!
So to the directors of NU I would like to say - I hope that your business nose dives and all these unhappy customers of yours use companies with UK call centres - come on folks lets make a stand and stop using businesses with overseas call centres. Keep the employment in the UK!!!!!