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As Wall Street tightens up its business model, investment banking analyst programs will be the next casualty, says an outsourcing executive who once managed Bear Stearns' global investment banking support services including research and graphic production.

Throughout the industry, analyst programs are expensive and inefficient, says Chris Niccolls, vice president of Integreon Managed Solutions Inc., a global provider of outsourced knowledge support services to professionals. "At least to bank management, the analyst program is a cost center -- a loss leader that no longer serves its grander purpose," Niccolls writes in The Deal Newsweekly. After factoring in a smorgasbord of incidental costs from IT support to car services and late-night meals, he estimates that a typical analyst position costs a bank $250,000, and a full analyst program costs from $100 million - $200 million.

Analyst programs traditionally served both as boot camps for future investment bankers and a labor pool to support senior bankers by creating pitch books, models and research support.

While some of this work has been outsourced in recent years, the "lion's share" of support services used by investment banks remain onshore, according to Niccolls. "Even with outsourcing encroaching on the borders of the analysts' world, the model hasn't really changed that much," he writes. "With banks desperate for earnings and capital, this track cannot be sustained."

He adds that firms that overhaul their programs must aim for better research, faster turnaround on pitchbooks, and/or lower costs to produce them.