IT Outsourcing Assignment Example | Topics and Well Written Essays - 500 words

IT Outsourcing - Assignment Example The article reveals the plan by the above top American banks to outsource IT services worth $ 5 billion to Indian companies of; Tata Consultancy Services, Wipro, HCL, Cognizant and Infosys. The plan to outsource it reveals, is as a result of the strict government compliance requirements brought about by recent legislations that include among others, the Dodd-Frank Wall Street Reform Act. The new laws require banking institutions to comply within 18-24 months pressurizing major banks to outsource activities not core to their businesses. The article further provides information on how significant the revenue from the American banks will be to the Indian companies citing TCS and Cognizant, both Indian compnies, as the initial beneficiary of the outsourcing exercise with revenues from their banking customers constituting 40%. Infosys is revealed to be earning 36.2% of its revenue from the writing of applications from banks like the Bank of America (Mishra & Sabharwal, 2011). The American are outsourcing back office related services and writing of applications. This is so because the mentioned services are of significance but not core to the operations of these banks. They can therefore easily offload them to external firms without interfering with their routine operational activities. Other services usually outsourced are back-up data storage, IT infrastructural development projects and website maintenance activities. The companies in the article are outsourcing to comply with government regulations and at the same time minimise operational costs. Most institutions however, the banks in the article included, are choosing to focus on their core businesses and leave subsidiary services to the experts through outsourcing. By so doing, profits for these instructions are rising and their service delivery standards improving since all their efforts are put to doing what their core businesses entail (Solli-Saether & Gottschalk, 2010). The institutions featured