Direct Line Group (DLG) has appointed IT consulting firm Capgemini as a partner in a five-year contract to design, deliver and run a new IT infrastructure, as it looks to move away from RBS's datacentres.
The £100m deal, which accounts for costs of hardware and of third parties, will involve the migration of Direct Line's corporate and business applications from RBS to an independent platform.
DLG floated on the stock exchange on 11 October. As part of RBS's divestment requirement by the European Union, RBS has to divest 50 per cent of DLG by the end of 2013 and the whole of DLG by the end of 2014.
Direct Line's CIO Angela Morrison told Computing that the move by DLG represents a significant step in its separation from RBS.
"Currently we have the majority of our systems run within the bank and do not have a Direct Line datacentre, it is all in the RBS datacentre, so as we became a floated company we could extract our systems away from the bank," she said.
"As we've sold and floated on the stock market the bank can no longer be the provider of our data and systems. As RBS is a bank it is not structured to provide these services to us on a long-term basis, so we have a translation services agreement with them for three years, for them to provide us with services, and therefore we need a long-term solution for our services requirements," she added.
Morrison explained that as DLG did not know if the company was to be bought or floated, the company had to do it in a way that would not incur too much cost to the business.
It sent out a tender to market, to bid for the establishment of two datacentres for DLG. It then narrowed down the bidders until it reached a conclusion that Capgemini was the best fit.
Morrison said that Capgemini stood out because it could help to meet DLG's objectives.
"Capgemini has a good technical solution and power usage efficiency (PUE) standard datacentres, which is good for us because of the cost of power. They allowed us to put our whole infrastructure in and also offered us some flexibility over the solutions that we bought and the longevity over which we had to buy those solutions for. It gave us the flexibility of being able to move onto different hardware over time," she said.
In addition to the migration process, DLG had many system renewals across its business, with equipment that needed to be replaced within the same period as the migration programme, and Morrison stated that Capgemini was able to give DLG the flexibility to help to achieve this, another reason for selecting the IT consulting firm.
The work on the project started this month and is expected to be completed by the end of 2014.
RBS's IT systems were put under severe scrutiny over the last year after a glitch that affected Ulster Bank, NatWest and the Royal Bank of Scotland. In August, RBS said that the glitch would cost the firm £125m.
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