Information technology outsourcing has become a pretty popular practice and can bring in many advantages if done correctly. The current worldwide financial problem has positioned many commercial enterprises into danger and outsourcing can cut that risk to a great extent by reducing your costs. After JP Morgan acquired WaMu and Bear Sterns, it now has bigger responsibilities to work in profit and they now look forward to IT outsourcing to trim costs. A March 2009 story in BusinessWeek mentioned that JP Morgan is going to step-up its Indian outsourcing budget by 25%.

Thus, approximately $400 million will be spent on outsourcing this year for JP Morgan. At the moment, JP Morgan is spending about $250-300 million in a year on subcontracting, most of which moves to TCS, Accenture and Cognizant. Guy Chiarello, the Chief Information Office for JP Morgan, wishes to make sure that his employer can trim their gross IT expenditure, according to an expert who wanted to stay clear of any media popularity. Although the word has leaked out to mainstream media via a trustworthy source, the Indian and US offices of JP Morgan didn’t reply when contacted by some media folks.

The international fiscal crisis has significantly struck the banking sector and other financial institutions should have considered similar measures. But so far, there haven’t been any news reports of big financial institutions spending a good deal on IT subcontracting.

Many banks have consolidated and acquisitions have taken place, so the records need to be refreshed to display the actual numbers for the single entity formed after the mergers. Past Washington Mutual customers would now control their accounts under JP Morgan so their historic records from their previous bank have to be imported now. And besides, these firms also have to merge their software systems and online trading applications to show users a single interface. All these modifications necessitate a large budget and IT outsourcing appears to be the best way to carry out these tasks in the most economical style; And Indians are suitable as they have talented IT labor, really low hourly wages, and solid English comprehension capabilities.

It’s not that the opportunity exists exclusively for large firms; small businesses can too gain here. With the potential lucrativeness of banking and real estate industries in jeopardy, people who have preserved funds now have to invest them elsewhere. So it may be a good time to take a fresh beginning and set up your personal venture. And hiring offshore employees to handle your IT demands is an effective way to start with a modest budget at the moment.