WOODS: We're not sure we understand the business value of going beyond that. We think it's a point of differentiation for us. Only six percent of involved companies are financial institutions. It's really hard to do, it's a major sea change. It doesn't just involve technologists but also lines of business.
WS&T: What is your perspective on outsourcing versus staying in house?
WOODS: We do a number of different kinds of outsourcing. We'll outsource certain functions to organizations that have applications that we consider best-in-class applications. We outsource our accounting for our private-wealth management (business). There are firms that invest in these applications consistently so it's something that we don't think makes any sense to do on a proprietary nature. Our objective has been to outsource 25 percent of our development functions to offshore by the end of next year, and we're almost halfway there.
WS&T: How do you establish possible outsourcing projects?
WOODS: The key with what we outsource and what we don't is first to make sure there are no contractual restrictions. We also need to make sure that the outsourcing firm can develop technical expertise to do it, and usually that's not the problem. We have found very few barriers to offshore outsourcing of application development. Part of that would be new applications that we're developing, and we choose those based on how much hands-on knowledge do you have to have about what you are developing. The other piece is the maintenance functions. You try not to outsource all of your expertise on any particular function or application because you want to make sure you always have contingency plans.
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