Second Largest Us Bank To Outsource More
IT subcontracting is an already understood practice and we should now move past the debate of subcontracting vs. internal development. The ongoing global fiscal crisis has put many commercial enterprises into danger and outsourcing can shrink that danger to a huge extent by reducing your expenses. Thats the road JP Morgan is choosing today, thanks to its acquisition of Bear Sterns and WaMu that have exerted more pressure to cut spending and satisfy stockholders anticipations. In a latest BusinessWeek report, it was reported that JP Morgan has decided to step-up its subcontracting spend in India by a big 25%.
So this means that the second biggest bank in the United States will throw around $400 million into its Indian outsourcing channel within the next 12 months. At the moment, JP Morgan is spending about $250-300 million in a year on subcontracting, most of which moves to TCS, Accenture and Cognizant. A New York based expert cited on condition of anonymity that the Chief Information Office Guy Chiarello took this step to ensure decrease in IT spending. Although the news has leaked to mainstream media through a reliable informant, the Indian and US offices of JP Morgan didnt respond when reached by some media folks.
In the light of the ongoing financial problem where financial institutions were affected a lot, it would be no surprise if others travelled along the same route of subcontracting. But up to now, there havent been any accounts of noteworthy banks spending a good deal on Information technology outsourcing.
The main problem is that big mergers and acquisitions of various banks have necessitated big changes to the information architecture now. Old WaMu customers would now operate their accounts under JP Morgan so their past records from their previous financial institution have to be brought in now. And in any case, these financial institutions also need to unify their software and online trading applications to present customers a uniform interface. So its no surprise that firms that have participated in recent amalgamations and acquisitions seek subcontracting to set these computerized data correct at minimal spending; Indian subcontracting companies already have vast experience in managing offshore US-based clients so thats where everyone is heading to.
Its not that the chance exists just for big firms; small firms can also benefit here. With the potential lucrativeness of banking and real estate industries in risk, individuals who have preserved money now need to invest them in other places. So it may be a good time to take a fresh start and launch your personal venture. And you can cut the initial investment involved by subcontracting your IT projects and similar non-core business operations.
So this means that the second biggest bank in the United States will throw around $400 million into its Indian outsourcing channel within the next 12 months. At the moment, JP Morgan is spending about $250-300 million in a year on subcontracting, most of which moves to TCS, Accenture and Cognizant. A New York based expert cited on condition of anonymity that the Chief Information Office Guy Chiarello took this step to ensure decrease in IT spending. Although the news has leaked to mainstream media through a reliable informant, the Indian and US offices of JP Morgan didnt respond when reached by some media folks.
In the light of the ongoing financial problem where financial institutions were affected a lot, it would be no surprise if others travelled along the same route of subcontracting. But up to now, there havent been any accounts of noteworthy banks spending a good deal on Information technology outsourcing.
The main problem is that big mergers and acquisitions of various banks have necessitated big changes to the information architecture now. Old WaMu customers would now operate their accounts under JP Morgan so their past records from their previous financial institution have to be brought in now. And in any case, these financial institutions also need to unify their software and online trading applications to present customers a uniform interface. So its no surprise that firms that have participated in recent amalgamations and acquisitions seek subcontracting to set these computerized data correct at minimal spending; Indian subcontracting companies already have vast experience in managing offshore US-based clients so thats where everyone is heading to.
Its not that the chance exists just for big firms; small firms can also benefit here. With the potential lucrativeness of banking and real estate industries in risk, individuals who have preserved money now need to invest them in other places. So it may be a good time to take a fresh start and launch your personal venture. And you can cut the initial investment involved by subcontracting your IT projects and similar non-core business operations.
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