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CSC, CNA Financial end outsourcing deal

Computer Sciences and Chicago-based CNA Financial mutually agree to part ways just two years into a rocky outsourcing deal.

Computer Sciences and Chicago-based CNA Financial have mutually agreed to part ways just two years into a rocky outsourcing deal.

In a joint statement issued by both companies, the firms said, "after analyzing many factors the companies jointly agreed it was in the best interest of the two companies to end the IT outsourcing agreement."

The contract, initially touted in 1997 as a $2 billion, 10-year outsourcing megadeal, was drastically scaled back to a more narrow computer services deal worth about $50 million annually by signing time. The firms agreed last week to end that deal.

A source said the relationship between the two vendors became strained after CNA Financial brought in a new chief information officer, leading executives to complain that "no one really owned the deal at the company."

About 500 CNA employees were hired under the contract as CSC employees. While many will transfer back to CNA over the next two months, some may opt to stay with El Segundo, California-based CSC, a CSC spokesperson said.

CNA is one of the nation's largest insurance firms with 1998 revenues of $17.1 billion.