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| IT majors in race for Rs 300-cr LIC contract | |
| Bibhu Ranjan Mishra & Shivani Shinde / Bangalore/mumbai December 12, 2008, 0:45 IST | |
At a time when the banking, financial services and insurance (BFSI) sector across the world is going slow on technology spend in the wake of the global recession, Life Insurance Corporation of India (LIC) — the country’s largest player in the life insurance segment — is soon expected to float a tender for a Rs 200-300 crore IT outsourcing contract. The bid document for the contract is expected to be submitted on December 15.
According to sources, the country’s leading IT services providers, including Tata Consultancy Services (TCS), Wipro, Satyam Computer Services and HCL Technologies, are in the process of bidding for the contract. LIC is planning to modernise its existing front-end application package (FEAP), which is COBOL-based, to make it accessible through the web. COBOL is one of the oldest programming languages.
After submission of the bid, LIC will go for a technical evaluation of the documents. The finalisation of the contract is expected to be complete by the end of January next year.
When contacted, an LIC spokesperson confirmed the development: “We are planning to modernise the existing system but the tenders are yet to be completed. Hence we would not like to say much.”
“As the applications will be accessible through the web, the load on the servers will come down, and the processing time will also improve. The processing will happen on the desktop and the cost of running the applications will come down drastically, as it won’t require to run the applications on Mainframe,” said a high-level source, close to the development. Part of the investment will also go towards increasing the bandwidth and installing new hardware and software solutions. “While the insurance major has a commendable network presence, they are increasing the bandwidth and hence will invest in hardware and software solutions,” another source added.
It is learnt that while issuing the bid proposal, LIC had wanted the participating companies to meet certain criteria, which include the bidder to be at least Rs 1,000 crore in size (revenue), and should have at least 1,500 dedicated people working on legacy modernisation-related projects relating to banking sector. LIC wants the whole modernisation to be completed within 9-12 months, it added.
It makes sense for Indian IT firms, including TCS, Wipro, Satyam and HCL, to bid for the contract since they are bullish on the domestic insurance space. Wipro, for instance, has a dedicated team of about 3,500 technology and business professionals for insurance sector. So has Satyam, which has already worked with a few insurance companies in the US and Australia for legacy applications modernisation and maintenance.
“We have established a vertical purely focussed on Insurance, and have announced outcome-based payment,” said a high-level source in the company.
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