Essay About Joint Venture Company And Strategic Objective

Abbey Case Study
Essay title: Abbey Case Study
INFORMATION AND E-BUSINESS SYSTEMS
ASSIGNMENT 1: ABBEY and EDS
SECTION 1)
ABBEY is a leading mortgage lender in U.K., structured in business divisions, namely Retail Banking, Wealth Management, Finance and Markets, Manufacturing, Risk, Central Units, HR.

A strategic objective for Abbey is to gain competitive advantage, that is to improve its competitive position through a better service to its clients, an improved effectiveness in its internal operations and a reduction in costs (estimated in savings of Ј9 million per year).

In May 2001 Abbey and EDS created a joint venture company, EDS Credit Services, for the post-sales servicing of Abbeys mortgages and personal loans.
Another strategic goal will be the diversification with the growth of this joint-venture in a company that the 2 partners hope to “become the leading specialist third party mortgage administrator in Europe”.

Thanks to that decision the management at Abbey can now focus on developing its core business (trying to capture new mortgage clients while maintaining the actual ones and realize new business projects), without losing qualified personnel, further time and financial resources in a back-office function that can be more effectively delegated to an IT supplier as EDS.

EDS will be responsible for services such as:
Account administration
Customer service
Payment processing
Account reporting
Arrears management, foreclosure and securitization
applications and infrastructures
There are different options we can envisage if our organization is not able and willing to develop its information system in-house. Generally we can take into consideration either LICENSE APPLICATIONS or to use the service of an APPLICATION SERVICE PROVIDER if our needs are not too specific and we need to be operative immediately.

We can also envisage the alternative of USER-DEVELOPED APPLICATIONS. However an increasing number of firms are choosing to OUTSOURCING the development of their ISs.

In order to decide whether a company need to outsource part of its functions or to develop and implement them in-house we need an extensive discussion on the particular circumstances surrounding the organization in question. This analysis will not reach a definitive conclusion but only a provisional one because the continuing changes in the competitive forces within the company and in the market will affect our choice in the long period.

Once we have identified our internal points of strength and weakness and our objectives, we can make a decision.
If the company chooses to outsource it will face another major decision: to whom delegate the task?
Generally we cut a deal with some IT outsourcing company after a public tender.
The top ten IT OURSOURCING COMPANIES are the following:
IBM Global Services
EDS
Computer Sciences Corp
Hewlett Packard
Infosys.
Wipro
Tata Consultancy Services
The choice of EDS secures the expertise of a world-class partner, reliable (unblemished track record in delivering result) and financially in good shape (important element when cutting deal in the long period).

Thanks to the decision of outsourcing we modify an important element of our cost structure: the mortgage processing is no longer a fixed cost but a variable one. That means more flexibility and less risk.

Generally speaking we can say that outsourcing can be useful and economically viable in that we can delegate the projecting and the implementation of a process to the expertise and competence of another subject. Our company can simply put the exiting human, technological and financial resources without spending time and money in personnel re-qualification, a new department or diverting from the enterprise’s core business. If properly projected and implemented this solution can not only result in savings but can also expand the flexibility in responding to market’s changes, add a new set of competencies to our company and eventually offer a better service to our clients.

Is’ objectives