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Outsourcing - IT Management Cop Out

It's incredible how many people still think building a system in-house is less risky and more cost effective. There are more internal developments that fail and at best come in over time and over budget and just does not do what was hoped for when the project began.

Let's be realistic the majority of IT people in financial services firms think they can do better and of course want to protect their jobs. 

Equally when firms have loaded up with an IT department they feel compelled to make use of it. Feeling that with an in-house build they have control and its cheaper than buying off the shelf. What a crazy thought!

This idea is not just bad management, its plain stupid!

No in-house build with ever be better than a comercial vendor who has invested and honed its technology and sold into live environments. The commercial pressure to make a success is far more motivating, than the job protection culture that purveys throughout most financial services firms.

How many IT people stay throughout the project and how many take the first option to jump before the whole thing blows up in their faces? Even worse most firms have to employ outside consultants to help manage or scope the in-house project further ramping up the cost.

Bad procurement in the past does not mean that buying systems today is a bad thing which can only be solved by building in-house. The oportunity to learn from past mistakes and buy better, is being lost and many firms are paying billions as a result and getting little or no return.

These issues and more will feature in the 29th September Post-Trade Forum where experts will debate with audience the respective values of outsourcing vs internalisation. It should be lively!

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Gary Wright

Gary Wright

Analyst

BISS Research

Member since

19 Sep 2007

Location

London

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Post-Trade Forum

The Post Trade Forum's aim is to propagate debate and discussion between senior practitioners in Post Trade Operations in the global securities market; to bring about increased awareness and knowledge across both buy-side and sell-side financial institutions in financial products and be a focal point for firms and practitioners to air views.


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