Vol 6 No 5
THE DALY OPEN
Calculating the Human Toll of Outsourcing
The cost of outsourcing in terms of financial IT managers and their headaches has been forgotten among all the hoopla and headline-grabbing associated with recent outsourcing agreements.
After the high-powered users and vendors finish their battles over the dotted line, small armies of IT managers and their staffs will have to do a lot of fancy footwork to make these ambitious outsourcing efforts succeed. Some, I’m sure, are prepared to walk the plank or join the outsourcer--few can say for certain which fate is worse.
Those who stay behind are gearing up for the long campaign ahead of them. As many will tell you over a Guinness in a dark bar, outsourcing as a concept is usually a smoother process than the real thing. Just ask the people at JP Morgan (before the annexation of Chase) about their experiences with the Pinnacle Alliance and its aftermath.
Or talk to those from the former SBC Warburg who had some interesting times with Perot Systems in the 90s.
And, believe it or not, some of the latest and greatest outsourcing deals, such as the IBM lovefest with JP MorganChase & Co., will completely bypass the securities trading area because it’s too vital to be outsourced, bank officials say.
It’s been rumored that heavy sighs of relief have punctuated the air in midtown.
As the users and the vendors dress their wounds from their mutually Pyrrhic victories, it will be interesting to see how the firms manage these massive overhauls. For some of them it will be an unprecedented journey. Will these firms be able to keep their best financial IT talent despite the instability around them? Is this really more than just another hot-and-heavy trend that will fall out of favor as soon as the economy shifts again? And if the economy turns around, is loyalty just a naïve notion when employees--like software and hardware systems--have been treated like commodities?
Tell me what you think via egrygo@riskwaters.com.
Eugene Grygo
Editor
