In 2005 it recorded sales of $79.9 billion and employed 168,847 people. In December 2002, the financial services company J.P. Morgan Chase announced a seven-year, $5 billion deal to outsource much of its data processing to the technology giant IBM, both companies bragged that the contract the largest of its kind for IBM would reduce costs, create value and propel innovation at J.P. Morgan. According to JP Morgan Chase management, this agreement would create "significant value" for clients, shareholders, and employees by creating capacity for "efficient growth" while reducing costs and increasing quality. The deal also ranks as IBM's largest outsourcing agreement, eclipsing its seven-year, $4 billion outsourcing arrangement with American Express.
The motivations for outsourcing are growing from a focus on cost reduction to an emerging emphasis on improving business performance. The traditional rationale of vendor economies of scale and specialization is becoming less convincing. Companies such as Dupont, British Petroleum and J.P. ...Show more