Wednesday, 30th April 2008
Tim Buckley Owen
It doesn’t look like a healthy time to be working in banking and finance. Heads are rolling at Credit Suisse and Deutsche Bank; J P Morgan is estimating 40,000 City job losses this year; and the recruitment agency Hays is freezing its headcount.
There may be a brighter side though. The FT has reported http://digbig.com/4wtyy one executive searcher as saying that banks will probably try to stagger their decisions, and another consultant as believing that City law firms are likely to be less affected – because they can seek other forms of business (such as insolvency), and because they may have learned the lessons of cutting too deeply last time and being ill-prepared for the subsequent upturn.
One issue rearing its head again at this time is that of outsourcing to cheaper locations. Consultant Gartner believes http://digbig.com/4wwaa that the economic slowdown in the US will lead to more outsourcing of IT functions to places like India, with established users accelerating their offshoring and newbies dipping a toe in the Indian Ocean for the first time.
Corporate information professionals have been here before. With their own back office functions not a million miles removed from those of IT, they’ve also had to counter the offshoring quick cost fix.
When I was editing Business Information Review http://bir.sagepub.com/ several articles that I commissioned set out some of the dilemmas surrounding offshoring. In December 2004, Sandra Ward of TFPL noted that outsourcing was shifting from standardized processes to higher-end activities; a year later, former investment banking researcher Richard Gaston questioned whether offshore researchers could provide in-depth or value-added research to the same degree as their UK-based counterparts.
Finally, just last year, Melanie Goody (then of KPMG) and Hazel Hall of Napier University considered the proposition that offshoring might be undermining information managers’ efforts to have business researchers placed in client teams within their organizations, rather than in a centralised function.
Gartner’s analyst Allie Young suggests that buyers will be ‘more aggressive with external service providers to have greater clarity on costs’. Indeed they should be – and on quality too, because a further survey suggests that offshoring can be a quick route to compromising your data security.
According to research commissioned by application security vendor Fortify Software from the information technology analysis group Quocirca http://digbig.com/4wwac the widespread outsourcing of software code development is leaving businesses exposed to data predators, because they are failing to mandate security in the development of these critical applications.
Now admittedly, Fortify has a pretty strong vested interest in publicising these findings. But times could get tough, and corporate information professionals will need to be ready to hunt out and dust down all the arguments they can – before the accountants move in.
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