Gartner: FSPs should boost outsourcing
A Gartner report has detailed EMEA financial service providers’ (FSPs) spending on IT services to reach US$ 46.2 bn for this year. It also reports that less than 30% of these would be outsourcing their more critical projects come end of next year.
This underlines a worrying lack of outsourcing in the FSPs’ corporate culture, as well as a wealth of untapped IT resources. The hesitation surrounding outsourcing services and projects could be attributed to labor relations disputes, among others, that come as an offshoot of a shift in work and resources.
Gartner research vice president Kimberly Harris-Ferrante cites, “Most FSPs currently use outsourcing tactically to augment staff for faster-project turnaround or to reduce operational costs, rather than for strategic value,” and goes on to point out that, “FSPs should now begin outsourcing strategic projects in order to gain larger-scale, enterprise-wide value.”
Harris-Ferrante believes that FSPs can maximize outsourcing with a comprehensive grasp of the opportunities and challenges that form an inseparable part of any major undertaking, not just with IT outsourcing and business process outsourcing (BPO). She specifies areas FSPs should gain a working understanding of:
- when to outsource
- how to use outsourcing tactically and strategically
- best types of projects and processes to outsource
- balancing onshore, nearshore, and offshore alternatives
- selecting the best outsourcing partner based on project scope, pricing model, risk tolerance, and business outcome
She enthuses, “If used properly, outsourcing can be a strategic tool to help FSPs transform their organizations, gain operational efficiencies, respond to shifting industry conditions and better meet top-level business objectives, such as increased profitability,” but also cautions, “However, if outsourcing is used incorrectly or not properly managed, it is a risk endeavor and can lead to wasted time, money, project failures and business failures.”
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