Aon Close to Turning Over IT Operations to CSC

Executives at Aon (Chicago) say they're close to a deal that would see the insurance and risk management firm turn over the operation of its basic IT operations in the United States to Computer Sciences (CSC, El Segundo, Calif.).

Under a proposed seven-year, $600 million outsourcing contract, CSC would assume responsibility for managing and operating Aon's U.S. data centers, telecom networks, and desktop support and help-desk services. About 600 of Aon's IT workers would transfer to CSC. Aon already outsources its IT infrastructure management in the United Kingdom to EDS under a deal that runs through 2010.

"There is still some due diligence to be worked out, but the likelihood is very, very high," that the two firms will close the deal with CSC, Aon executive VP and CIO June Drewry says.

Outsourcing is part of an effort by Aon to centralize its U.S. IT operations. "We're pulling together shared services that had been handled by different business units," Drewry says. As a result, Drewry says that Aon would save about 30 percent annually on IT infrastructure costs once the contract is fully implemented. Aon would save about $300 million over the life of the contract, she adds.

Drewry says the outsourcing deal would benefit Aon in ways beyond cost savings. With security still topmost on the minds of executives at the company -- it was one of the firms hardest hit by 9/11 attacks on the World Trade Center -- Drewry says Aon is continually looking to improve its business-continuity and security systems. "We feel we can strengthen our security by leveraging [CSC's] technology," she says. "That is key, and we intend to get stronger."

Editor's Note: This article, written by Paul McDougall, recently appeared in InformationWeek, a sister publication of Insurance & Technology.