INFORMATION SYSTEM

Information System- Outsourcing Causes and Effect the Bank of America experince

Table of Content

INTRODUCTION3

DISCUSSION4

Lower Operating Costs6

Corporate Tax Breaks6

Rising Unemployment7

Off-shoring White Collar Jobs7

Deteriorating Quality7

Outsourcing challenges9

FBR9

Managing and Monitoring the Outsourcing Arrangements11

Create a management structure to establish, manage and supervise the outsourcing arrangement.11

Technology outsourcing14

When outsourcing hurts: technology outsourcing and integrative capabilities16

When outsourcing hurts: technology outsourcing and presentation in the market18

Limits to pitfalls from outsourcing: the function of know-how in former associated technology19

Internet banking20

Conclusion21

REFERENCES23

Information System- Outsourcing Causes and Effect the Bank of America experince

Introduction

The central issue that recognized in this paper relates to the Global Communications scenario is the implementation of plans to realize significant cost savings by shifting hundreds of expertise jobs to India, Singapore, and China. Bank of America IT executives estimate a savings of approximately $100 million since 2003 by off shoring some work that was previously presented in the US and the UK. But just as important was the keeping of highly skilled and motivated employees that the bank realized when it develops new products and services.

The Bank of America was formed in 1998 after the amalgamation of California based Bank of America and the Nations Bank of North Carolina. At the end of the 20th 100 years the bank stood as the second largest bank in the American market with close to 4500 branches operating in 21 states. Most of these branches were located in high development markets of the south and west coast. Globally, it engaged 1, 40,000 employees across 190 nations, over $8 billon in revenues, $360 billion in deposits and some $600 billon in assets. However the markets had been consolidating for sometime with the total number of banks in America having decreased to 7000 from a number of 14000 first noted in 1995. Intense affray characterized the market and the challenge for national banks was to be able to localize merchandise and service offerings for their customers.

Discussion

Few banks can stay abreast of all new technology developments through interior efforts alone. Outsourcing relationships with technology vendors have become widespread and have developed from outsourcing of repetitive and equitably specialized tasks to outsourcing of more convoluted technologies and whole business processes. In 2000, over half of all information technology (IT) services in North America were outsourced. As the outsourcing of whole business processes becomes more widespread, the questions arise of if outsourcing is always beneficial, and if there are limits to benefits from outsourcing. Prior research is equivocal about the performance implications of outsourcing.(Hamel, 2008) On the one hand, former work views outsourcing as a means to increase effectiveness, decrease costs, or foster innovation by profiting access to cutting-edge technologies, specialized resources, and discovering opportunities. On the other hand, researchers contend that outsourcing can lead to the hollowing of corporations, the depreciation of bank capabilities, or weakened coordination across activities between a bank profiting access to a new technology and its subsequent proficiency to internalize and leverage such in the market. (Zollo, 2002)\

It's apparent that the process of outsourcing has gathered impetus over the ...