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Jp Morgan Chase Shifts It Outsourcing Into Reverse

5453 words - 22 pages

S.I.D- 0574220
TO : Chairman, President and C.E.O. of JP Morgan ChaseFROM : IT ManagerSUBJECT : JP Morgan Chase Shifts IT Outsourcing into Reverse.DATE : August 27, 2007.IntroductionJP Morgan Chase is a financial company with $ 1.2 trillion in assets and $ 106 billion in shareholders equity. JP Morgan Chase is one of the oldest financial services firms in the world and operates both banking and non-banking subsidiaries. Both globally and regionally. JP Morgan Chase runs an additional set of businesses including its Private Equity and Treasury Businesses, Corporate Support companies, automobile financing companies, leasing companies, e-commerce companies and other financial services ...view middle of the document...

There a quite a number of strategic analysis tools which can be used to determine the key influences on JP Morgan Chase & Co.'s business environment.The following strategic analysis tools were used to determine the key influences on JP Morgan Chase & Co.'s business environment.S.W.O.T Analysis- SWOT analysis is a tool for auditing an organization and its environment. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.SWOT Analysis- PRE-MERGER
Strengths

Weaknesses

JP Morgan Chase is one of the largest financial service firms in the United States.
Competes both globally and regionally.
Operates in over 50 countries worldwide.
Ability to meet the objectives and needs of clients.
Superior reputation, their ability to attract and retain its personnel and the appeal of their products to their consumers.
$5bn Outsourcing agreement with IBM.

JP Morgan Chase's IT infrastructure was not sufficient in maintaining their systems in their business operations.
Transferring of employees to IBM's payroll resulting in employee dissatisfaction and loss of productivity as a result of the outsourcing agreement with IBM.
Consultants had to be brought in to assist in implementing the outsourcing strategy and in helping employees through the transition which caused additional expenses to be incurred
Decrease in productivity due to a heavier workload for employees.

Opportunities

Threats

The outsourcing agreement with IBM would allow JP Morgan Chase to be more competent by reducing costs and increasing quality.
The agreement with IBM would create significant value for clients, shareholders and employees.
IBM would supply its clients with flexible IT costs hence JP Morgan Chase would be able to scale its IT expenditures rather than paying full costs. There would be a reduction of costs by reducing the IT expenses.

Large number of competitors due to operating in over 50 countries both globally and regionally.
The fact that IBM could supply its services for numerous companies the size of JP Morgan Chase.
Employees having to do extra work, having salary reductions and re-application processes for their jobs could cause the workforce to be de-motivated and lose productivity.
Routine work which used to be done in could no longer be done again due to the new infrastructure implemented by IBM.
Negative impacts would cause JP Morgan Chase to seek to cancel the outsourcing agreement with IBM.

S.W.O.T. Analysis - POST-MERGER
Strengths

Weaknesses

Merger with Bank One Corp. to promote cost cutting and self-sufficiency from a do-it-yourself approach.
Long term growth and success for JP Morgan Chase by the management of its own technology infrastructure.

Bringing outsourced work back in-house, proved very detrimental to JP Morgan Chase.
Employees lost their jobs on the re-shuffle back into JP Morgan Chase. The new merger with Bank One created 12000...

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