UK
Barclays and Lloyds TSB have outsourced yet more IT functions to India, and the exodus of high-end development roles is likely to continue.
Lloyds TSB has offshored 450 roles there and has plans to outsource some jobs from its programme management department, which employs 75 people. This follows on from the 250 roles shipped out in May last year.
The bank has offered to find suitable replacement positions for the affected staff, but Lloyds TSB’s union (LTU) has said there’s no guarantee they’ll be on the same pay, or even working in IT.
Steve Tatlow, assistant general secretary of the LTU, said: “A lot of people will be choosing redundancy. We are fundamentally opposed to offshoring.”
Barclays, meanwhile, has stated that it will be upping the number of IT jobs outsourced to India and elsewhere, and increasing the complexity and value of the processes it offshores.
Nick Mayes, senior consultant at IT think-tank Pierre Audoin Consultants, says this is an ongoing trend: “India used to be a location for low-level maintenance and support roles, but now it’s more higher-end development work around new systems.”
The National Outsourcing Association (NOA) is divided over whether investment banks’ current cost-cutting could mean more or less IT outsourcing.
Martin Hart, chairman of the NOA, cites the recent example of UBS canning a 1bn outsourcing deal at the last minute: “But the financial services sector has always been leaps and bounds in front of other vertical markets in the UK in terms of outsourcing – they are well versed in how to harness it to help them improve internal efficiencies and engineer processes.”
And it’s not just India you have to worry about: Russia, Czech Republic and Ukraine are all new hot spots, says Hart.
Hayes adds: “The fact is, there’s a skills shortage for high-end development roles in the UK, particularly around SAP. Deutsche Bank does a lot of development work out of Ukraine. There are a lot of ex-Soviet Union military programmers. They have a very strong scientific background and are doing highly skilled work around customer relationship management systems.”
“The fact is, there’s a skills shortage for high-end development roles in the UK, particularly around SAP.”
What a load of self-interested tosh – there is no skills shortage for development roles – the banks are doing this because they can get the same skills for a cheaper price – basic economics – Mr Hayes(?)
CTB and revenue generating IT (such as algo trading) will always be run out of London/NY. Most of the developers in these areas are so good that even if you had ten “high-end” developers in India they won’t be able to match their productivity.
RTB and cost centre IT is doomed to outsourcing, and for good reason. Banks are banks, not technology companies.
Anybody who’s ever worked with anything offshored to India know full well that the service you get is horrendous and you may as well do it yourself as it will save you half the time and headache.
A lot of banks have realised this and have begun to move a lot of jobs back to the UK (especially offshored jobs in Product Control).
Offshoring sounds good in paper but unfortunately rarely executed well.
Offshoring for Unix Engineers & Desktop Support is fine but front office developers, nah!
Some years ago, my then CEO met a guy in a bar, and got him and a couple of mates to write some code. My CEO was in no way an IT person, and the whole situation was not exactly perfect.
I say this because at least he had met the guys, and we got there in the end. I contrast this with the off-shoring stories I hear. Not only is the experience as bad as several posters here say, but often they come to see the outsourcing firms as actual enemies. I quote from a senior ex-executive at ABN AMRO, “we thought we had firewalled EDS off, but we keep bumping into them”. Basically he used the same language as one hears in the “Alien” films, where hostile creatures work their way into your building, killing as they go.
Contrary to what you read, EDS is not the worst outsourcer, many people have worse experiences.
“…Offshoring sounds good in paper but unfortunately rarely executed well.”
Oh how true this is. Adding “layers” to an organisation does not bode well for operational quality.
Firms now recognise offshoring does not work, hence the evolved concept termed near-shoring. Is this concept much better? I doubt it.
The back office needs to move in harmony with the front office. This requires, yes you’ve guessed it, communication. Layering degrades communication.
One of the reasons for the poor quality of service provided by offshore processes is that they are dealing with apparently standardised, commoditised, processes. These processes have variable inputs of a fixed format and return a variable output, again, in a fixed format. IB operations processes need to be flexible – they are NOT similar to a factory producing ceramic cups. If ops processes were this prescribed then would easily map to being executed as a computer process.
That is the beginning of the end.
You think you are saving, but you get a crap service.
You talk to someone who cannot even understand your question.
In the end you waste a lot of time and your IT problems don’t get sorted. Unix and intelligent users with dedicated teams onsite are the answer. For 80% of the users though, India might more than adequate, but these 80% do not command 80% of revenues.
Beware ….
Military programmers? :D
IT from India can be of same quality as in the UK if not higher. Depends on whether you have built(or building) a strong team there or just passing it over to some vendor companies. Both of them are equally costly and IBs use the vendors for temporary positions or onsite support positions and develop their own teams of strong programmers for long term positions. The problem is the there is huge talent for IT out there and they are cheaper than here.