IT outsourcing (ITO) has become a tool that is frequently used by firms for reducing their portfolio of activities and achieving, among other things, economies of scale and skill by using a specialized provider. Because of their high level of IT reliance and business processes that are mostly fully digitizable, the value opportunities offered by outsourcing are especially attractive for financial services firms. Accordingly, Hirschheim and Dibbern (2002) found the first remarkable ITO deal in 1963 when insurance company Blue Cross of Pennsylvania outsourced its data processing to EDS. However, despite many other industries having utilized advances in information and communication technologies — as a subsequent step — to restructure their value creation, to outsource, automate, and integrate business processes, and to form value networks, there is still substantially less disintegration of value chains in the financial services industry. As a consequence, experts assume that there are significant efficiency potentials in the industry.
KeywordsBusiness Process Information System Banking Industry Cost Allocation Saving Bank
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