back to article Co-Op Insurance and IBM play blame game over collapse of £175m megaproject

In a long-running spat, British insurer Co-Op Insurance is suing IBM for £155m over what it claims is Big Blue's "deliberate" failure to deliver a new IT platform for the British financial services provider. In legal arguments shown to London's High Court this week, CIS General Insurance Ltd (CISGIL) – the insurance arm of the …

  1. CAPS LOCK Silver badge

    Good news for...

    ...Mercedes dealers in London and Armonk

    1. Natalie Gritpants Jr

      Re: Good news for...

      Indeed, trebles all round for those whose bonuses depended on the signing of contracts and not the delivery.

    2. katrinab Silver badge
      Trollface

      Re: Good news for...

      And drug dealers and sex workers in Bradford

    3. Yet Another Anonymous coward Silver badge

      Re: Good news for...

      Every time IBM etc announce a deal with a bank, buy law firm shrares

    4. Erik4872

      Re: Good news for...

      IBM can keep this up for decades. They have a guaranteed money stream coming in from mainframe and quite honestly there are use cases that really still need mainframe-level processing. They also have enough multimillion dollar offshore outsourcing projects running, plus they now have Red Hat.

      They've basically completed the transition to an Accenture or PWC or similar....just juggling massive outsourcing contracts and jumping from contract to contract without really producing a lot.

  2. Imhotep Silver badge

    And Another One Bites The Dust

    I wonder if a certain other financial institution going to IBM to solve its IT problems is concerned by this?

    Nah, probably not.

    1. katrinab Silver badge
      Unhappy

      Re: And Another One Bites The Dust

      TitS up Bank?

  3. localzuk

    Sabadell in a few years time?

    Seems to happen far too often with IBM... Wonder if we'll see this with Sabadell in a few years time...

  4. Pascal Monett Silver badge

    Ah, England and IT

    Is a marriage not made in Heaven. So, another wreck along the IT highway. What's betting that we'll have IBM on one side, with all the documentation needed to prove that they respected the specifications and were forced by the client to do a lot of additional work, and Co-Op on the other side with a hodepodge of contradicting emails and some meeting minutes where they will try to prove that IBM was playing fast and loose with the definitions of the specifications ?

    Let the mudballs fly and we'll see where they land.

    1. Michael Wojcik Silver badge

      Re: Ah, England and IT

      Precise numbers vary based on methodology and dataset, but all the studies I've seen have concluded that a majority of large IT projects fail. I don't know that England is special in this regard.

  5. John 104

    Duh

    When you fire all of your technical people this is what happens...

    1. Michael Wojcik Silver badge

      Re: Duh

      Based on the article, in this case most of the technical work was outsourced to IG anyway.

  6. Mark 85 Silver badge

    What do they expect?

    The contracted org outsources the work. The outsourcer than hires monkeys and pays them peanuts. I'm surprised that companies asking for bids don't just put in a clause that says something like "no outsourcing". But then, that would cost real money.

  7. Anonymous Coward
    Anonymous Coward

    That's another exclusive hire of Necker Island for some lawyers and their families for a nice month long stay after the HP vs Mike Lynch case.

  8. Anonymous Coward
    Anonymous Coward

    oh dear, yet ANOTHER project IBM failed to deliver. Meanwhile the client could now go out of business due to IBM's failure to deliver a modern IT system.

  9. ecofeco Silver badge

    IBM fail?

    Shocked I tell you. Shocked.

  10. Anonymous Coward
    Anonymous Coward

    An outsourced project is outsourced by the outsourcer

    Another reason to have internal developers... It's cheaper in the long run. When will the bean counters and idiot managers learn?

  11. silks

    No Outsource Clause

    Maybe COOP should have specified a "no outsource clause" or at least made it a condition that any outsource of services would be declared upfront and agreed between the various parties.

    1. Michael Wojcik Silver badge

      Re: No Outsource Clause

      Was it not declared? The article says Co-Op claimed they were told the IG package was an "out-of-the-box solution". My impression is IBM told them pretty early on, possibly in the proposal, that they'd be using Insurer Suite. Since IBM does not have their own commercial package for this industry vertical, you'd think Co-Op would have wanted to know where the software was coming from at the start.

      I'm not saying IBM didn't misrepresent Insurer Suite - they may well have; I don't know anything about the situation beyond what's in the article. But it doesn't sound to me like they represented it as something developed in-house.

  12. CrazyOldCatMan Silver badge

    In how many industries..

    .. can you sell something to someone (and lie about^w^w mis-state the functionality), do nothing for 18 months and then tell the customer that they have to pay you anyway?

    If you tried that in any other industry that I can think of you would be out of business in a year.

    1. Anonymous Coward
      Anonymous Coward

      Re: In how many industries..

      "can you sell something to someone (and lie about^w^w mis-state the functionality), do nothing for 18 months and then tell the customer that they have to pay you anyway?!"

      Seems to be quite popular among the arms industry vendors.

  13. Valerion

    "Project Cobalt also marked the start of a strategic move by IBM into the insurance platform sector"

    Yeah, I bet that strategic move started the very second they answered the phone and someone said "Hi, this is the Coop, do you do insurance systems?"

  14. sketharaman

    TBH, a "no outsource" clause won't help. As someone who has worked in the industry and negotiated such contracts and delivered such projects, it's always possible to circumvent a "no outsource" clause by "insourcing" the subcontractor's product and people. Happens all the time in systems integration contracts where the end-to-end scope of work involves many suppliers and products and customer wants a single throat to choke. It's simply impossible for the Prime Contractor to do everything on its own without partnering with the other suppliers. At least in this case, the saving grace is, the customer has a single vendor - IBM - to sue.

    1. Doctor Syntax Silver badge

      Asking for an appropriate reference site running the product is a good move. If there isn't one then you're buying a piece of string of indeterminate length tied round the neck of a poke containing an alleged pig.

  15. Anonymous Coward
    Anonymous Coward

    ahah TSB ahaha

  16. Michael Wojcik Silver badge

    Winning at failing

    Big Blue's "deliberate" failure

    If you fail, but do so deliberately, then don't you actually succeed? (I believe this is in fact a popular strategy in certain circles.) I'm not sure it's logically possible to have a deliberate failure.

  17. Sparrowlegs

    What happened in the trial? I live in the US, has it been reported upon?

    1. TechHeadToo

      Ah yes - you live in the US, so maybe suffer from Donald Chump syndrome. The article ends with

      The trial will continue for the rest of this month. The Register will be covering key moments. The court will hear evidence from key people within the Co-Op, IBM and IG. ®

      (apologies to you personally - if you're reading this, you're probably intelligent -but, you know, Donald says he's super intelligent - and he can't read to the end of a briefing)

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