But has IT become a utility, as a controversial article argued last May in the Harvard Business Review? "Absolutely not," says Rangaswami. In order for technology to become a utility, he says, it has to reach a level of standardization, which it has failed to do. Furthermore, while certain aspects of IT have reached a point of commoditization and "could be a utility, the industry should be careful not to throw the baby out with the bath water," he says. Technology can still provide a distinct advantage
But what about outsourcing, which has become Wall Street's cost-saving darling? Isn't this one way banks can rid themselves of routine tasks? Rangaswami warns investment firms of the seduction of supposed cost savings. "What I lose with offshoring is far more than I gain," he says of DrKW's own experience, which was "focused on the war for talent rather than wage arbitrage. With outsourcing I may reduce the core execution cost but I pay for it by increased coordination and training costs." DrKW found in some cases that the local offshoring staff had to be spoon fed and that the typical attrition rates of 40 to 50 percent meant they were often training staff to ultimately benefit others.
Rangaswami also urges firms who do embark on outsourcing contracts to "clean up their garbage first," rather than dumping it onto the vendor, who will most likely charge a considerable premium for the cleansing.
I wish I had said that!
Which reminds me, a theater reviewer in Chicago wrote his 2004 summery of the exclamations he wanted to scream during various performances. He listed that he wanted to yell, I wish I'd said that during my sister's adaptation of Strong Poison. You go, girl!