CGI strengthens LocalTapiola strategic partnership with new models enabling agility at scale

Rhea-AI Summary

On June 17, 2020, CGI (NYSE: GIB) announced a contract worth EUR 49 million (approx. C$74.5 million) with LocalTapiola, a major Finnish insurance firm. This agreement aims to enhance LocalTapiola's modernization efforts by providing digitization services as part of the Toivo project. CGI will implement new delivery models for improved productivity and cost control, utilizing a hybrid development model to manage numerous projects effectively. CGI has been LocalTapiola's IT partner since 2013, supporting operations globally.

Positive

• Contract valued at EUR 49 million (approx. C$74.5 million) strengthens partnership with LocalTapiola.
• Implements new delivery models for enhanced productivity and cost control.
• Continues a long-term relationship that began in 2013, enhancing customer service.

Negative

• None.

HELSINKI, Finland, June 17, 2020 /PRNewswire/ - CGI (NYSE: GIB) (TSX: GIB.A) announced it has been awarded a contract with LocalTapiola, one of Finland's largest insurance companies, to provide further digitization services for the insurer's largest modernization project. The agreement strengthens the long-term strategic partnership between the companies to meet LocalTapiola's business objectives, such as improving the customer experience. The contract is valued at an estimated EUR 49 million (approx.C$74.5 million).

"As part of the Toivo modernisation project, we renewed our agreement with CGI to build a digital foundation to overhaul our system for providing insurance against loss or damage. We are now also renewing a contractual package in which CGI will continue to handle a variety of initiatives, such as how to implement digital services in the most agile and cost-effective way possible," said Mikko Vastela, CIO of LocalTapiola.

Over the past few years, CGI has developed a variety of new digital services for LocalTapiola customers, including TerveysHelppi (Health Help). These mobile telemedicine services have made it easier for LocalTapiola customers to access healthcare, such as treatment services and referrals.

As part of the new agreement, CGI will implement new delivery models to ensure optimal productivity and cost control.

"Using agile methods to develop innovative digital services has proven to be effective. However, when an initiative contains hundreds of projects, it is understandable that certain controls must be placed on development work – controls that are not found within standard agile methods. That is why we have been working with LocalTapiola to create a brand-new hybrid development model and its associated contractual practices, " said Leena-Mari Lähteenmaa, President of CGI in Finland.

"A redesign of our operating models has made them more agile in many ways, and this is also linked to the development of our new hybrid model. CGI has demonstrated its ability to provide customer-oriented service and innovative value creation," said Janne Kärkkäinen, Director ICT Finance and Sourcing at LocalTapiola.

LocalTapiola outsourced its IT operations to CGI in 2013. CGI's service delivery model operates on a 24/7 basis by combining development in Finland with support from around the world, including Europe, Asia and North America. In accordance with CGI's quality and management framework, accountability for service delivery is provided in proximity to the client.

About CGI
Founded in 1976, CGI is among the largest independent IT and business consulting services firms in the world. With 78,000 consultants and other professionals across the globe, CGI delivers an end-to-end portfolio of capabilities, from IT and business consulting to systems integration, outsourcing services and intellectual property solutions. CGI works with clients through a local relationship model complemented by a global delivery network that helps clients digitally transform their organizations and accelerate results. With annual revenue of C$12.1 billion, CGI shares are listed on the TSX (GIB.A) and the NYSE (GIB). Learn more at cgi.com.

Forward-looking information and statements
This press release contains "forward-looking information" within the meaning of Canadian securities laws and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable United States safe harbours. All such forward-looking information and statements are made and disclosed in reliance upon the safe harbour provisions of applicable Canadian and United States securities laws. Forward-looking information and statements include all information and statements regarding CGI's intentions, plans, expectations, beliefs, objectives, future performance, and strategy, as well as any other information or statements that relate to future events or circumstances and which do not directly and exclusively relate to historical facts. Forward-looking information and statements often but not always use words such as "believe", "estimate", "expect", "intend", "anticipate", "foresee", "plan", "predict", "project", "aim", "seek", "strive", "potential", "continue", "target", "may", "might", "could", "should", and similar expressions and variations thereof. These information and statements are based on our perception of historic trends, current conditions and expected future developments, as well as other assumptions, both general and specific, that we believe are appropriate in the circumstances. Such information and statements are, however, by their very nature, subject to inherent risks and uncertainties, of which many are beyond the control of CGI, and which give rise to the possibility that actual results could differ materially from our expectations expressed in, or implied by, such forward-looking information or forward-looking statements. These risks and uncertainties include but are not restricted to: risks related to the market such as the level of business activity of our clients, which is affected by economic and political conditions, external risks (such as pandemics) and our ability to negotiate new contracts; risks related to our industry such as competition and our ability to attract and retain qualified employees, to develop and expand our services, to penetrate new markets, and to protect our intellectual property rights; risks related to our business such as risks associated with our growth strategy, including the integration of new operations, financial and operational risks inherent in worldwide operations, foreign exchange risks, income tax laws, our ability to negotiate favorable contractual terms, to deliver our services and to collect receivables, and the reputational and financial risks attendant to cybersecurity breaches and other incidents; as well as other risks identified or incorporated by reference in this press release, in CGI's annual and quarterly MD&A and in other documents that we make public, including our filings with the Canadian Securities Administrators (on SEDAR at www.sedar.com) and the U.S. Securities and Exchange Commission (on EDGAR at www.sec.gov). For a discussion of risks in response to the coronavirus (COVID-19) pandemic, see Pandemic Risks in section 8.1.1. of our Q2 2020 quarterly MD&A.  Unless otherwise stated, the forward-looking information and statements contained in this press release are made as of the date hereof and CGI disclaims any intention or obligation to publicly update or revise any forward-looking information or forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. While we believe that our assumptions on which these forward-looking information and forward-looking statements are based were reasonable as at the date of this press release, readers are cautioned not to place undue reliance on these forward-looking information or statements. Furthermore, readers are reminded that forward-looking information and statements are presented for the sole purpose of assisting investors and others in understanding our objectives, strategic priorities and business outlook as well as our anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes. Further information on the risks that could cause our actual results to differ significantly from our current expectations may be found in the section titled "Risk Environment" of CGI's annual and quarterly MD&A, which is incorporated by reference in this cautionary statement. We also caution readers that the above-mentioned risks and the risks disclosed in CGI's annual and quarterly MD&A and other documents and filings are not the only ones that could affect us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial could also have a material adverse effect on our financial position, financial performance, cash flows, business or reputation.

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SOURCE CGI Inc.

FAQ

What is the value of the contract CGI signed with LocalTapiola?

The contract is valued at EUR 49 million (approx. C$74.5 million).

When did CGI announce the contract with LocalTapiola?

CGI announced the contract on June 17, 2020.

How does the new contract impact CGI's partnership with LocalTapiola?

The new contract reinforces the long-term strategic partnership, focusing on digitization and modernization.

What is CGI's stock symbol?

CGI's stock symbol is GIB.

What modernization project is CGI involved with LocalTapiola?

CGI is involved in the Toivo modernization project for LocalTapiola.