“I’ve decided to take advantage of outsourcing. My next novel will be written by a couple of guys in Asia.” -Tom Robbins
So, good citizens of Gonzoville, let’s start our brief time together today by stipulating that every bank is outsourcing more, and for good reasons we don’t need to rehash here. But, we all know that every time we outsource a function, we outsource the knowledge and skills that are required for it.
Most of the time, a decision to outsource follows a decision that the trade-off is OK. For example, payments transaction processing, payroll, penetration testing, and some audit functions are all jobs somebody else can do as efficiently, and we’ll say adios take the knowledge trade-off.
But, for all the time we spend thinking and talking about what can be outsourced, how often do we talk about what can’t and shouldn’t be outsourced because the knowledge trade-off is unacceptable? Like, never OK? Shouldn’t our insource list be as long as our outsource list? And shouldn’t it get as much if not much more focus?
We suggest you strategically focus your insourcing efforts on these five things:
So, there are five of our “non-negotiables” for insourcing. To play on a famous quote by Groucho Marx, “if you don’t like our non-negotiables, we have others.”
Choosing what to outsource is a crucial component of strategic planning. Choosing what not to outsource is even more crucial. What’s on your non-negotiable insource list?
2 thoughts on “Five Things Banks Can Never Outsource”
Terence, I can certainly agree with your five areas that can’t be outsourced. Getting Boards of Directors to ‘buy-in’ may be the hardest part as they tend to believe that outsourcing is the latest and greatest thing since sliced bread:-)
Mike, I agree that educating boards on what they shouldn’t outsource is both important and hard.