Technology

Outsourcing on the Outs at JP Morgan Chase

Its merger with Bank One this past January ''created a new firm with significantly greater capacity to manage its own technology and infrastructure.''
Ed ZwirnSeptember 17, 2004

About 4,000 technology workers and contractors currently employed by International Business Machines Corp. must be starting to feel a little dizzy.

The workers had been transferred from JP Morgan Chase & Co. to IBM as part of an outsourcing agreement hailed as “the largest of its kind” less than two years ago. At the time, JP Morgan Chase called the deal “groundbreaking” and said that the $7.2 billion deal would last seven years, according to the Inquirer, a London-based newspaper.

Effective January 1, however, those workers will return to the bank’s payroll, according to a statement by the companies. The reason for the turnabout, wrote JP Morgan Chase, is that the company’s merger with Bank One this past January “created a new firm with significantly greater capacity to manage its own technology and infrastructure.” The bank added that “after a rigorous review, the merged firm concluded it now has the significant scale, enhanced capabilities, tools and processes to build its own global infrastructure services organization.”

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Some of the previously outsourced portions of its technology infrastructure that JP Morgan Chase planned to “insource” include data centers, help desks, distributed computing, data networks, and voice networks, according to the announcement. The bank added that IBM remains one of the largest key technology partners for JPMorgan Chase and will continue to provide IT services and products to a number of its major businesses.