What drives and constrains outsourcing decisions in corporate and investment banking — and what role should enterprise architects play?
Outsourcing operations processing is a live and recurring challenge for executive leaders in corporate and investment banking — and the decision is rarely as simple as comparing internal and external costs. This 2013 presentation by SJ van der Westhuizen, delivered at the Inspired TOGAF/EA Forum in Johannesburg, draws on research across thirteen banking organisations to map the full set of forces at play, distinguishing clearly between what drives outsourcing and what constrains it.
On the driving side, the research identifies capability maturity, capital preservation, management focus, and the formalising effect of contracts as significant positive forces. On the constraining side, organisational form complexity, responsiveness to change, reputational risk, management culture fit, and capability maturity concerns about prospective vendors all emerge as meaningful brakes. Cost and revenue, often assumed to be the dominant drivers, are shown to be more nuanced than executives typically expect.
A particularly valuable thread running through the presentation is the specific contribution enterprise architecture can make at each decision point — from capability-based planning and CMMI assessment, to operating model design, TOGAF governance frameworks, and the business model canvas. The central conclusion is direct: the greater the level of EA maturity in an organisation, the greater the number of business objectives achievable through outsourcing.
Originally presented by SJ van der Westhuizen at the Inspired TOGAF/EA Forum, Johannesburg, July 2013.