Is Full Applications Outsourcing Back on the Table in Financial Services?

September 28, 2011
Operations/ Benchmarking
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

Report Published by Celent in Cooperation with Oliver Wyman

Only a small amount of financial institutions have undergone comprehensive outsourcing of their IT application development and maintenance (ADM).

A number of failed experiments have convinced the majority of financial institutions that the risks are not worth taking. While that may have been true in the past, current trends indicate that many should begin to reconsider.  Recent client work suggests that up to 80% of the typical financial institution’s ADM activities can be outsourced, delivering cost reductions of 20% to 40%.

In this report, Is Full Applications Outsourcing Back on the Table in Financial Services?, Oliver Wyman looks to debunk and demystify the traditional conceptions of full ADM outsourcing and help financial institutions embrace a realistic, structured approach to understanding the potential rewards and associated risks.

In the end, comprehensive outsourcing will not be right for everyone,” says John Boochever, Partner in the North American Strategic IT & Operations Practice and coauthor of the report. “Different financial institutions face different savings and risk outlooks based on their maturity, scale, environment and capabilities.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Introduction

2

 

1. The benefits of comprehensive ADM outsourcing

2

 

2. Risks in comprehensive outsourcing and their mitigants

6

 

3. Decision analysis in ADM outsourcing: “…or how to get off the dime”

8

 

4. Case studies

10

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