Credit Suisse to shift focus to small vendors

Courtesy: http://economictimes.indiatimes.com/

Credit Suisse, which is outsourcing its software application maintenance and development projects to Wipro and Cognizant, will now work with almost eight smaller, niche firms, such as Headstrong, as the Switzerland’s biggest bank seeks to mitigate risks associated with two large suppliers.

While the existing vendors, including Wipro and Cognizant, will continue to deliver application development and maintenance projects, new work in specific domains, such as retail and private banking, will be executed by a new set of smaller suppliers.

The bank is also expected to review and outsource an infrastructure contract, currently with HP, by the middle of this year, Divyesh Vithlani, managing director and chief information officer of Credit Suisse Asia Pacific, told in an interview on Thursday.  However, he declined to name the new suppliers.

“As part of our second phase of outsourcing, we plan to outsource almost 40% of niche projects to around 6-8 smaller vendors,” he said. Some of the niche projects would include delivering solutions based on the banking software T24 offered by Temenos, apart from other specific applications. “We want redundancy and do not want to concentrate our risks,” he added. Headstrong, which recently acquired mortgage data processing firm Lydian Data Services, specializes in the financial services industry.

Meanwhile, the bank is closely evaluating the developments at Satyam Computer Services.

“We do have a very significant exposure to Satyam and we are monitoring the situation.”

With over 1,000 IT professionals from suppliers such as Wipro and Cognizant doing application maintenance work for the bank, Credit Suisse employs almost 12,000 engineers globally.

Later this year, Credit Suisse will also seek to award an outsourcing contract for managing servers and desktops. “Expect a decision on this by middle of this year we are currently reviewing our current contract with HP, which is up for renewal,” Mr Vithlani said.

Initiatives such as risk mitigation and working with niche suppliers is a part of Credit Suisse’s multi-year IT transformation, aimed at creating centers of excellence across India, China, US and Singapore. These centers will specialize in different set of capabilities in the banking domain, and will help Credit Suisse leverage the resources as and when required.

“Interestingly, while IT spending on new technology initiatives is delayed at the moment, TowerGroup is observing renewed interest on the part of many FSIs to build strategic plans for IT transformation, understanding very well the limitations of their present IT structures,” Virginia Garcia, a TowerGroup research analyst said in her December note.