Research On IT Services Outsourcing Strategy Of China Technology Center Of H Group

This study aims to explore the IT services outsourcing strategy for the China Technology Center of H Group.Along with its strategic adjustment after global financial crisis,digital bank has become the key of H Group's core business development direction.China Technology Center,the second largest offshore center after India's,it's providing a series of business related IT services to the group,playing an important role in the transformation of H Group's digital business strategy.In facing both the internal and external challenges from the lower cost competition of India Technology Center and the rapid innovation of FinTech(Financial Technology),China Technology Center needs to improve their IT service level in a fast peace,especially for the application development and delivery capability,in order to meet the touch business requirement,be embodied in the values of the group.It has been proven that these challenges couldn't be resolved by making change in organization internally and adopting the regular IT outsourcing practice simply.Now the topic about how best to utilize external resources for maximizing the IT delivery capacity is already on the table of management team and under exploration.By studying the foundational theories of services outsourcing and reviewing its development path and future trend,it's found that services outsourcing is not only still taking effective,but also having evaluated a lot in the tide of globalization and playing a more important role along with the deeper global division of labor and the rapid growth of information technology.In the past,enterprises adopted outsourcing approach for the non-core business activities with intension of reducing cost only,but now the main purpose of doing this is for acquiring the professional resources and capabilities that the organization is unable to provide or build internally,especially for IT capability.The modern information technology for enterprises is crucial,even concerning their survival.Nowadays,the market is constantly changing and the information technology is rapidly changing the world.It makes those non-IT enterprises having difficulty to build and maintain sufficient IT capability to support the demand from businesses from internal force,or the cost will be very expensive.The approach of cooperating with external resources has become a new norm,and it gives rooms for the enterprises to strengthen their competitiveness by focusing on their core competence.On another aspect,the traditional financial enterprises,especially banking which is with strong dependence on the IT system,like fish and water,can't be divided.Any system failure could cause a serious impact on the banking business.The subsequence of security incident will be even worse as it concerns about the general public's interests.Therefore,the regulatory department in most countries and regions are conducting a serious monitoring on banks.Theinformation security and operational risk will be much attention when financial enterprises do IT outsourcing.This makes the financial enterprises taking a relatively conservative approach.Last but not lease,new technologies such as cloud computing,big data,block chain,etc.are emerging and becoming mature.FinTech companies adopt new technology faster that brings great impact to the traditional financial enterprises,as well as to H Group.That's why H Group keens to promote new technology and requesting for an uplifted IT capability to cater for the fast-changing business demand,and at the same time to ensure a high security standard and compatible cost.In terms of outsourcing,China Technology Center is acting two roles.One is as service provider providing IT services to the Group internal customers,another is as Group's representative seeking for cooperation opportunities with third-party service providers outside the Group.This needs to consider more special factors from China Technology Center's perspective.Through onsite research,analyzation of China Technology Center's internal and external factors by using SWOT tool,it identified the outsourcing targets in the company's value chain,provided recommendations on establishing outsourcing center in tier 2 cities and in a new cooperation model with external partners.All the expected results will be improving the current situation in the key aspects,like cost,efficiency and security.By taking the complementary advantages of the new outsourcing IT services centers,the resource,technology and knowledge could be shared and merged as China Technology Center's capability and demonstrated its value.It's hoped that this case study and practical outsourcing strategy will play a positive role in the strategic research of IT outsourcing.