JP Morgan Chase-IBM - The Outsourcing Journey

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Case Details:

Case Code : ITSY047
Case Length : 12 Pages
Period : 1999-2005
Pub Date : 2005
Teaching Note :Not Available
Organization : JP Morgan Chase
Industry : Financial Services
Countries : US

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

The company began transferring its employees and IT assets to IBM in April 2003. By January 2004, the transfer was complete and work began on consolidating data centers, upgrading hardware and setting up a common networking infrastructure, a task that was scheduled to take two years to complete.

In July 2004, Morgan merged with the Chicago-based Bank One to create a financial behemoth with combined assets of $1.1 trillion.

Bank One was a strong player in the consumer banking business. The deal reduced Morgan's dependence on investment banking.

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Bank One was also adept at managing technology in-house. It had developed considerable expertise over the years in managing technology and integrating systems from acquired businesses.

In August 2004, Morgan cancelled the outsourcing contract with IBM and decided to rehire its 4,000 employees who had been transferred to IBM. The bank stated that after the merger it had better capabilities to manage its own technology infrastructure.

It added that technology was critical to the bank's future and hence, it had decided to exercise full control over it. Commenting on this, Austin A. Adams (Adams), CIO of Morgan said, "After a rigorous review, the merged firm concluded it has the significant scale, enhanced capabilities, tools and processes to build its own global infrastructure and services organization."³...

Excerpts >>

3] "IBM loses $5 bn Outsourcing Deal," MCN Direct Newswire, September 20, 2004.

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