[LINK] Gershon recommendations adopted

Bernard Robertson-Dunn brd at iimetro.com.au
Tue Nov 25 11:04:40 AEDT 2008

Rick Welykochy wrote:
> I have always been a champion for keeping skills, knowledge and corporate
> memory in house. Any other approach seems doomed to failure, imnsho.
Some years ago a certain large bank (I'll let you guess which bank) was 
having a  bad year and looked like it was going to make a loss. So it 
decided to sell all its IT - hardware and people - to an outsourcer. It 
was then able to post a profit that year.

It wasn't outsourcing to cut costs, it wanted to look good. Ten years 
later they discovered that there were many IT people working within the 
business. What had happened was that the business needed to understand 
their systems and make sure the outsourcer was doing the right thing - 
which they often weren't. So they went out and hired their own IT people.

On making this discovery, senior bank executives - who had not realised 
what had been happening - decided to re-create an IT department, bring 
all the IT related jobs back into a single structure and acquire many of 
the skills they had lost to the outsourcer. The real cost of the bank's 
IT had been much greater than they thought over the ten year period and 
they had lost knowledge, flexibility and capability.

They are still struggling to understand their own systems and at the 
same time modernise - by using outside organisations of course, they 
can't do such complicated things themselves.

Its like watching children at play, and would be funny it it weren't so 


Bernard Robertson-Dunn
Canberra Australia
brd at iimetro.com.au

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