Outsourcing poised to increase
So who benefitted from the great recession and the aftermath on Wall Street?
One of the biggest beneficiaries was outsourced service providers. The idea of outsourcing, especially offshore, was once seen as a dubious move by big banks. But the cost imperatives that cascaded down on banks in recent years have broken down resistance impressively.
It's gotten to the point where just about all functions, even sensitive front-office trading-oriented functions, are fair game. Wall Street & Technology notes that, "Once only thought of negatively as a way to cut head count and reduce short-term costs, outsourcing has become part of the financial services industry's fabric for long-term strategic planning and success."
It notes also that recessions have always led to spikes in outsourcing, much of which ends up permanent, as long as it works out.
"Today outsourcing is much more than finding low-cost software development resources. Companies are using it to improve services, enter new business lines, run more efficiently and drastically reduce time to market."
It would be fair to say that offshoring has worked out well in many areas, even the higher value-add areas, such as basic investment banking and stock research. Garden variety analytical work can be done pretty much anywhere these days.
One field in which it is not working out so well might be customer service. Anecdotally anyway, more companies are finding that the home-grown approach is more effective. Still, the overall trend is clear.
- here's the article