Offshore IT Sourcing: Decision Making Process in an Italian Banking Group

Abstract

Organisations often cite financial and cost benefits as reasons for deciding to outsource. However, recent patterns and trends suggest different factors, other than costs, are motivating such decisions. As a result, outsourcing (and its derivative offshoring) is more complex than it may first appear, as witnessed by a case study involving an Italian bank that decided to offshore aspects of its information systems (IS). The article presents findings from the case study, the underlying motives and the decision making process responsible for the change.  These include: risk management, processes simplification as well as diminishing the uncertainties that come with self-managing its own technology. The case-study approach was conducted and based on an extensive questionnaire about bank's offshoring activities distributed to IT managers, and on-site interviews with the CIO and the Head of IT Governance, which was followed up through several one-to-one meetings, telephone interviews and e-mail exchanges.

The case study presents answers to the why, how, what and which interrogatives for offshoring IS functions in hopes of providing a model to those organizations facing similar situations. While best practices highlighted in other articles are essentially confirmed, the present study offers insight into important differences result from Bank's decision not to resort to consultants to act as liaison between supplier and project type, and decisions in terms of ideal in-house/onsite/offshore ratio [1], types and sizes of projects best suited for offshore [2].