Those Nifty Little Niches | Article
For Unisys Corp., outsourcing is a business embedded in a product company.
For Unisys Corp., outsourcing is a business embedded in a product company.
On average, banks that outsource their information technology (IT) are substantially reducing costs. According to American Banker, banks are averaging savings of 15 to 20 percent in operational costs from outsourcing. First Fidelity Bancorp, which has $29 billion in assets, is a good example of a bank that has achieved considerable savings through outsourcing. The institution reduced their operating expenses by as much as $150 million in 1991, with the bulk of the savings derived from lower labor and equipment costs related to IT. But blindly pursuing outsourcing because it is what the company next door is doing, and doing well, is not necessarily a good decision, says Dr. Detmar Straub of Georgia State University.
Best Niche Deal: Merrill Lynch and AT&T Solutions. Merrill Lynch and AT&T Solutions could give lessons in how to make a niche deal work. Merrill Lynch had specific network needs, so they turned to the vendor dominating that segment of the industry.
Outsourcing: The Big Picture. The outlook for pure outsourced big deals will decrease in the coming year, according to Jim Champy, chairman of outsourcing at Perot Systems.
The burgeoning demand for increased flexibility and information exchange is driving a marketplace move to networking, according to Rick Roscitt, president and CEO of AT&T Solutions.
Commonwealth Bank of Australia (CBA), the largest bank in Australia, has 6.5 million customers. Until late last year, the bank’s internal technology services department with 1,500 people was the second largest shop in Australia. Now that scene has changed dramatically. CBA and EDS have forged a two-part relationship which includes an outsourcing services contract. The other side of the relationship is a true partnership. CBA bought 35 percent of the EDS business in Australia.
International Outsourcing: Executives at Grupo Nacional Provincial (GNP) know all about the value of research. Statistics and other research information are part of their day-to-day business as the largest insurance company in Mexico. Therefore, when the company was considering outsourcing part of their Information Technology (IT) functions, the first step logically was research.
The JP Morgan deal gets the award for Most Important Deal from the Editor’s Choice Awards for a number of reasons…