Pensam and KMD enter into IT outsourcing mega deal
PenSam and the IT group KMD have just entered into a seven-year agreement that puts KMD in control of PenSam's IT portfolio for pensions. The scope of the agreement is unprecedented for the industry and provides PenSam with new opportunities to operate an effective pension business with a stronger focus on the customer. This deal is in fact the largest corporate deal in KMD's history and is seen as a realization of the potential of a number of acquisitions in recent years - including the acquisition of IT company Edlund, who are a market leader in Denmark with regards to software development for life insurance and pension companies.
PenSam is outsourcing the entire IT portfolio for pensions. For the next seven years, the IT group KMD will be responsible for providing IT support to PenSam's pension business.
The agreement includes a thorough reorganization of PenSam's core IT systems. Over the next two years, KMD will partner with PenSam to implement a new total industry solution in the life insurance and pension field. Additionally, KMD will take responsibility for all maintenance activities related to PenSam's remaining software as well as expand the IT infrastructure, including IT security. KMD will also take control of all IT operations. In accordance with the agreement, 50 employees will move from PenSam to the KMD Group on October 1.
PenSam, as well as the industry in general, has wasted far too much energy on IT. The service we deliver to our customers will be improved, as we can now devote all our energies to being there for our customers. It has been important for PenSam that KMD can deliver a complete IT solution for the life insurance and pension field, and also that they have high ambitions to develop software that can be used by many in the pensions field. It ensures that there will be focus and clarity, explains Torsten Fels, CEO at PenSam. And he adds:
- By grouping tasks with a single external supplier, we are also entering into a scenario that will lead to significant efficiency gains when it comes to IT. This obviously counts as a positive in our continuous efforts to become more competitive.
Our acquisition strategy is materializing
For KMD, the agreement is the culmination of a series of acquisitions in recent years - and a significant step forward in KMD's growth agenda in the financial sector, which is a sector that the company is currently focused on. To date, the agreement is the largest corporate deal in KMD's history.
The agreement includes key deliverables from KMD subsidiary Edlund, who became a subsidiary in the summer. Capevo and Scanjour, who KMD acquired in 2014, are also providing software to the IT support service that PenSam will receive.
- The agreement with PenSam is a milestone for KMD on many levels. It sums up the rationale behind our acquisition strategy. Today, KMD is in a very strong position in relation to a wide number of tasks within the field of IT support in the financial vertical. It is a great day for KMD and we look forward to entering into a close and good partnership with PenSam, says Eva Berneke, CEO at KMD.
KMD also sees considerable potential in the new industry solution for the life insurance and pension field. The solutions central core and fundamental modules are ready, but it must now be implemented and developed in partnership with PenSam over the next two years.
- In addition to the delivery of services to PenSam, we also see the agreement as a platform for further growth in the sector. This applies both to Denmark and eventually to the rest of Scandinavia. Edlund's standard solution will fulfill a need for significant consolidation of software in the industry, in which many people have an extensive catalogue that is running many different IT solutions, explains Eva Berneke.
PenSam offers flexible financial products to customers for pensions, insurance and banking. The principal business activity is based around occupational pension schemes. The total balance sheet amounts to almost DKK 140,000,000,000. Around 400,000 wage-earners, who are employed by municipalities, regions and private companies, have an occupational pension with PenSam.
KMD is the largest Danish-based IT company, and the majority of KMD's business derives from its own software development. For over 40 years, KMD has worked with the development, operation and maintenance of Denmark's largest IT systems. Today, KMD develops and delivers software and service solutions for local government, central government and the business sector in Denmark. In recent years KMD has built up a solid portfolio of private customers and today handles assignments for over 800 Danish and foreign companies. By delegating such areas as IT operation and system maintenance, payroll and staff administration and printing tasks to KMD, companies can focus on their own core competences – to the benefit of their day-to-day business, strategy and innovation. The KMD Group has annual revenues in excess of DKK 5 billion and around 3,200 employees. KMD is owned by Advent International and Sampension. Read more at www.kmd.dk.
KMD, Director, Communications, Christoffer Hellmann, mobile (+45) 25 29 17 84, firstname.lastname@example.org, Twitter: @Chris_Hellmann
PenSam, Senior Economist, Søren Dijohn, mobile (+45) 61 22 29 98, email@example.com