Outsourcing is so yesteryear
by Volker Weber
The Register reports:
JP Morgan is canning a $5bn, seven-year outsourcing agreement with IBM. IBM won the contract ahead of EDS and CSC, taking responsibility for the investment bank's data centres, desktop support and network services.The deal was signed 30 December 2002 and was hailed by Eric Ray, vice president for financial services at IBM, as "the largest computer services deal in the financial services sector".
Four thousand JP Morgan staff moved to IBM: they are all returning to the bank, beginning January 2005.
Comments
Outsourcing is a challenge; reversing it is a bigger challenge.
Key players who have been outsourced aren't necessarily impressed to discover they are being treated like a spare parts inventory and shifted back to their original employer, and some will quite likely look for a job elsewhere.
I'd say interesting times are ahead for JP Morgen's IT VP...
I used to work for a time at JPM (before they were taken over by Chase and before they sold their custody business to BNY) in the IT and well remember the time that they (then already) outsourced the whole development team out to a new company made up out of 3 bidders (pinnacle ? top ? something with a mountain).
While not in development myself the general remark was that everything took 3 times longer to get done, at the work level. For example, simply getting a few CD-R disks to back some stuff up had to be requested in triplicate - in the end the guy went out and bought them in a shop...
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