The Negative Impact Of Outsourcing It Employees In The Banking Sector To Other Countries

Literature ReviewBusiness Process Outsourcing and selective information technologyBusiness process outsourcing can be defined as a practice of identifying and executing processes which is best for the contrast that is tracking d consume for an improvement in the subsisting business processDuring early 90 s outsourcing was considered as an innovatory business Huber (1993 ) illustrates that the carry behind the Continental Bank to outsource its IT activities to IBM for a 10 year contract is a revolutionary step interpreted in the business world . Huber squabbles that for any banking industry it would be deceptive to consider IT as a ticker business which yields profit , as IT in baking industry is a non-core activityHuber has identified four significant problems with Continental Bank s Information Technology department- Firstly , the information technology activities in Continental Bank consumes more time and money , Secondly the banks reckoner body had legacy problems which resulted in poor adaptability according to guest s needs in addition , the up gradation of the vivacious system would absorb huge capital investment furthermore , banks attempt to integrate the information technology activities from departmental system has yielded moderate results , and finally , the bank has engaged nearly d IT employees out of which half of them was considered as incapable of handling major(ip) system up gradation and thus banks IT department was calculated as overstaffedHuber has explained the expected rewards of outsourcing IT activities in banks . The advantages include easy acuteness to innovative technology that would fulfill customer expectations , slews the time taken to develop new technology driven products , and transfer IT associate cost from fixed to variable . Huber explains when the demand enlarges the cost of IT would increase above the actual in-house IT cost and when the demand decreases the bank would reduce its IT related cost .

Strict monitoring and rigorous judgement of IT activities which are integrated in the contractual terms and policies , has a resulted in reduction of nearly 10 million on yearly basisOn the other hand , Lacity and Hirschheim (1993 , 1995 ) have stated that outsourcing of IT activities yields broader advantage than cost reduction . The advantage includes reduced volatility in business business could concentrate more on its core activities , and outsourcing minimizes the burden and obtains positive media reports . Hirschheim from his study states that reduction in cost obtainable from outsourcing dose not solely depends on economies of shield however , the same cost reduction strategy could be effectively used in their own company with their own staff . Since the approach of outsourcing can reduce the customer service of process and let the firm to be involved in their managerial activities outsourcing seems to be beneficial . Lacity and Hirschheim have used a soprano approach in maintaining the deliberate procedures while outsourcing the IT activities by implementing a strict contractual agreement and penalties for negligence of quality in performanceAccording to Quinn (2000 ) companies by outsourcing the knowledge based activities can focus on limited resources i .e . minimum core competencies , thereby removing the perceptual constancy of predetermined expenditures and administrative system . From...If you want to get a full essay, order it on our website: Orderessay

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