JP Morgan Chase Expanding India Outsourcing By 25%?
JP Morgan Chase is reportedly planning to increase its use of Indian outsourcers by 25% to handle the IT integration of Washington Mutual and Bear Stearns and other projects. The moves are expected to cut overall IT costs for JPMC even as it raises its volume of Indian outsourcing business to a reported $400 million.
JP Morgan Chase is reportedly planning to increase its use of Indian outsourcers by 25% to handle the IT integration of Washington Mutual and Bear Stearns and other projects. The moves are expected to cut overall IT costs for JPMC even as it raises its volume of Indian outsourcing business to a reported $400 million.JP Morgan will use Indian outsourcers to integrate IT systems from its recent Washington Mutual and Bear Stearns acquisitions, pushing its 2009 Indian outsourcing contracts to almost $400 million, according to a news report out of Bangalore.
The strategy is being driven by JP Morgan CIO Guy Chiarello as part of his wide-ranging efforts to shave costs from the country's second-biggest bank, according an article in the Economic Times:
"JP Morgan is one of the first banks in the U.S. to have fleshed out its outsourcing strategy ever since the banking meltdown happened. Many others are still undecided about their IT spend," said a senior official at one of the technology firms, who did not wish to be quoted.
The article did not say which Indian companies had won the bidding for the additional $100 million of work, but it did say that JP Morgan currently spends between $250 million and $300 million with Cognizant, Tata Consulting, and Accenture. In addition, JP Morgan also operates its own captive IT operation in Mumbai.
If the report turns out to be accurate, it will prove to be a huge boost for the Indian IT services sector, which has been jarred in the past six months by the global economic recession and by statements from President Obama warning of wide-ranging protectionism. JP Morgan is seen as a Wall Street leader in IT strategy, and Chiarello is regarded by many as the top CIO in the financial-services market.
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