Medibank ditches big-bang IBM GSA deal

Medibank Private has replaced a big-bang information technology and telecommunications outsourcing arrangement with IBM Global Services Australia with a "multi-vendor, selective-outsourcing" model.Medibank -- Australia's largest health fund -- said today it had "exited from all but the mainframe services" provided under the five-year agreement with Big Blue's Australian services arm after a review of its outsourcing arrangements.

Medibank Private has replaced a big-bang information technology and telecommunications outsourcing arrangement with IBM Global Services Australia with a "multi-vendor, selective-outsourcing" model.

Medibank -- Australia's largest health fund -- said today it had "exited from all but the mainframe services" provided under the five-year agreement with Big Blue's Australian services arm after a review of its outsourcing arrangements.

The organisation instead broke down its requirements to a model whereby some functions were insourced and the remainder outsourced in piecemeal fashion. It awarded a midrange services and facilities contract to Datacom Systems, desktop and helpdesk to Getronics and Telstra secured managed network services.

IBM GS is to look after mainframe operations under a two-year deal while core systems are replaced.

The review -- managed internally and completed over a 12-month period -- also included a physical separation of Medibank's shared mainframe environment from that of the Health Insurance Commission.

The original Medibank agreement with Big Blue's services arm had been signed in 1999 as part of the whole-of-government outsourcing arrangements prevalent at the time, with additional services added to the mix the following year.

Medibank chief information officer, Surinder Singh, said the new arrangement would "align our business and IT strategies," as well as reducing costs and improving service quality.

Under the three-year Datacom deal, five separate datacentres are to be consolidated to the vendor's GlobalCenter centre in Melbourne.

Michael Browne, chief executive officer at Datacom, claimed Medibank's midrange infrastructure and services were migrated over a four week period without any disruption to the insurer's business.