Programme on Strategic Outsourcing of IT Activities in Banks

Banks in India have been implementing Information Technology based Banking Solutions such as CBS, ATM, Internet Banking, Tele-banking, Card Based Services,
Electronic Payment Systems, Data Warehouse, etc., to provide round the clock prompt customer service. A significant portion of these activities are carried out
using outside vendors and consultants to manage the implementation. Postimplementation,these solutions require continuous monitoring, maintenance, upgrades and enhancements or implementation of new solutions. As Information Technology is not their core domain of expertise, banks have typically outsourced activities such as Hardware and Software Maintenance, Hosting and Managing Data Centers, Software Application Support, Disaster Recovery Management and Management of Networks. They are also in the process of giving contracts (while
some activities have been already given) to third parties to manage other non-core support services such as call-support services, help-desk support, credit card
processing and printing, cheque processing and clearing, ATM cash replenishment,cheque box clearing and collection, loan servicing, data processing, etc.
There are significant challenges in managing the outsourcing activities specifically managing the vendors followed by contracts, SLAs, ensuring service levels and
coordinating interdependent activities among diverse vendors and also managing projects for new implementations, upgrades and enhancements. As the outsourcing of IT activities are increasing over time, and banks have strategic objectives of reducing costs