Saving Money, Saving StaffBy Larry Barrett | Posted 2006-01-14 Email Print
Modernizing Authentication — What It Takes to Transform Secure Access
The bank's CIO says the move last year to bring its technology operations back in-house wasn't about money, but the bank is already seeing dividends.
As far as human resources, Adams says between "95% and 98%" of the original 4,000 JPMorgan Chase information systems employees who transferred to IBM Global Services have returned to the bank. He acknowledges that a handful of current and former employees have been unhappy with the back-and-forth that's occurred over the past three years.
Going forward, Adams says the company continues to focus on projects that will reduce costs and improve efficiencies.
Still, it's hard to make any direct correlation between this change in philosophy and the company's bottom line. The early numbers suggest a mixed bag.
Net income for JPMorgan Chase, excluding results from Bank One, was $4.5 billion in 2004, a decrease of 34% compared to 2003. Net income for the merged company was $10.3 billion in 2004; results for Bank One, which is not a public company, have not been disclosed.
JPMorgan, before the Bank One acquisition, reported sales of $44.1 billion in 2003; numbers for Bank One were not available. In fiscal 2004, the merged company posted sales of $57.3 billionan increase largely attributed to the Bank One merger.
What lessons are there for companies? "Insourcing isn't for everyone," Scardino says. "Some of the biggest inhibitors to insourcing are the time, disruption and cost of getting out of the current contract."
So far, Adams doesn't mind being a pioneering insourcer. "We never stood in judgment of how other companies approach this issue," he says. "For us, insourcing is a better alternative."
JPMorgan Chase Base Case
Headquarters: 270 Park Ave., New York, NY 10017
Phone: (212) 270-6000
Business: The nation's second-largest bank and financial services firm has assets of more than $1.1 trillion, and has an extensive portfolio of mortgage loans, automobile loans and credit card customers.
Chief Information Officer: Austin Adams
Financials in 2004: $57.3 billion in sales; $4.5 billion in net income.
Challenge: Bring back in-house the management of information-technology infrastructure, rehiring more than 4,000 I.T. employees from IBM Global Services.