Outsourcing in IT Industries

Outsourcing, or the use of third-party service providers, is a business strategy that is being considered more frequently by IT and financial institutions as they respond to an increasingly competitive marketplace. While not new, many of the activities currently being outsourced, such as information systems, business processes and internal audit, are integral to the functioning of the organization, vital to supporting core businesses and create dependencies upon service providers. Given the scale and prevalence of these types of arrangements, outsourcing raises potential supervisory concerns.