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Outsourcing - Source of Contention


By Adam Ripley

Outsourcing can save companies a fortune 聳 but its success depends on testing procedures.

In the UK Cheap James Reimer Jersey , the financial services industry has always been leagues ahead in outsourcing and offshoring. Most of the mega deals at the start of the outsourcing revolution involved financial services companies. Realising the benefits of outsourcing IT and processes such as human resources and finance, the investment bank community has began to outsource more critical functions.
For example, last year Scottish Friendly outsourced the lion's share of its 拢355m life fund to Legal & General. In another deal, Abbey selected State Street Global Advisors, JPMorgan Fleming Asset Management and Barclays Global Investors to run its Abbey National UK Growth Unit trust.
Despite the proliferation of the different types of financial services outsourcing, it has not been without its problems. Earlier this year Cheap Nick Bjugstad Jersey , the FSA released the findings of its investigation into offshoring financial services, warning companies they face increasing levels of risk if they send processes offshore. The conclusion was that offshoring could contribute a material risk to the industry objectives of market confidence, reduction of financial crime and consumer protection.
However, it is not only risks around offshoring that transpire in financial sector outsourcing. Lack of adequate testing procedures around outsourced systems is another issue that has caused problems for financial services companies. Systems collapsing as a result of poor testing can have catastrophic fallout for the companies concerned, as it can cause deflated consumer confidence, significant reputation damage and can be extremely costly. A high profile example of this is online bank Cahoot. At the end of 2004 Cheap Troy Brouwer Jersey , Cahoot suffered a security lapse, when a failure to adequately test an upgrade resulted in a breakdown to the password system, exposure of customer account data and significant brand damage.

Problems
In fact, failures in systems testing have caused problems in outsourcing projects in lots of sectors, not just the financial services market. The Child Support Agency is a prime example. Dogged by innumerable problems, the CSA's 拢456m computer system caused havoc with the organisation's attempts to track and secure child support payments from absent parents. The reason behind the system's failure was a lack of testing 聳 inadequate capacity and performance testing plunged the CSA's working practices into chaos.
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