| Information technology outsourcing is an already | | | | to information technology expenditure. |
| understood practice and we should now move past | | | | The serious trouble is that large-scale mergers and |
| the debate of subcontracting vs. internal development. | | | | acquisitions of several banks have called for big |
| And the motivation to subcontract your secondary | | | | modifications to the data architecture now. This would |
| activities increases due to economic hardships similar | | | | also demand combining each institution’s database |
| to the current international fiscal crisis. That’s the | | | | so that customers don’t face trouble even if they |
| route JP Morgan is choosing nowadays, thanks to its | | | | had an account in the bank that has been acquired by |
| acquisition of Bear Sterns and WaMu that have put | | | | another one now. And in any case, these companies |
| more pressure to cut expenses and match | | | | also have to unite their software packages and online |
| stockholders’ expectations. In a recent | | | | trading applications to show customers a uniform |
| BusinessWeek report, it was mentioned that JP | | | | interface. So it’s no surprise that firms that have |
| Morgan has decided to increase its outsourcing spend | | | | participated in recent amalgamations and acquisitions |
| in India by a massive 25%. | | | | look for outsourcing to set these computerized data |
| So this means that the second biggest financial | | | | correct at minimal expenditure; Indian outsourcing |
| institution in the United States will put in around $400 | | | | service providers already have great experience in |
| million into its Indian subcontracting channel inside the | | | | managing offshore US-based clients so that’s |
| following 12 months. Their present-day outsourcing | | | | where everyone is looking at. |
| spending is approximately $300 million. A NY-based | | | | While these are big banks with extensive resources, |
| expert mentioned on condition of anonymity that the | | | | the same exercise can be executed by small firms |
| Chief Information Office Guy Chiarello took this | | | | too. With the potential profitability of banking and real |
| measure to ensure decrease in IT expenditure. | | | | estate sectors in jeopardy, individuals who have |
| Although JP Morgan spokespeople were contacted by | | | | preserved money now need to invest them |
| journalists, they did not issue any reply yet. | | | | elsewhere. So it may be a nice time to take a fresh |
| In the light of the circulating financial crisis where | | | | start and establish your personal business. And you |
| financial institutions were affected a lot, it would be no | | | | can contract the original investment required by |
| surprise if others travelled along the same path of | | | | outsourcing your information technology projects and |
| subcontracting. But still, numerous other banks seem | | | | similar non-core activities. |
| uncertain of the path they will consider when it comes | | | | |