Rbs Computer Failure ‘Caused By Inexperienced Operative In India’

3419 words - 14 pages

Case study is about computer failures that occurred at Royal Bank of Scotland due to inexperienced operative in India. this has resulted in millions of customers unable to access their account simply because of a mistake made by a technician. This issue occurs when the software upgraded is implemented. All programming staff at RBS admits that matters is occurred because they have been based in Hyderabad, India.
Based on technology website, The Register, there were team members who need to responsibility for the incident and it has affected the department in the UK. Union has blamed Fiasco because they decide to take more IT employees of the company from outsource. This will be affects the local workers, Indian staff, because they are paid less than British Counterparts.
The Chief Executive of RBS, Stephen Hester defended outsources company and said that there was no evidence that the problem is due from company outsources. The error is occurred after the software upgraded to the bank’s computer system last Wednesday, and it affects 17 million customers. Although the problem can be resolved on Friday, but RBS has a backlog of more than 100 million transactions that were not paid in or out of the bank.
The RBS already make a promised that will pay all the compensation for the cost of fines and late fees to their customer. The bank experts said that RBS need to paid all the costs of compensation, including the cost of extra staff to customers within 50-100 million Pound Sterling. Mr Hester also admitted that the bonus for the Senior Staff of RBS will be reduce for the reimbursed.
Mr Hester had to waive bonus shares worth 63,000 Pound Sterling for public protests and political pressure. The Finances Services Authority will ensure that RBS solve all these problems, and make sure if the problem occurs again, it can be overcome.

Question 1
Critically evaluate the competitive advantage that can be gained by companies through IS/IT outsourcing. Provide suitable example to support your answer.
Competitive advantage can be said as an advantage that a firm has over its competitors, allowing it to generate greater sales or margins and/or retain more customers than its competition. There can be many types of competitive advantages including the firm's cost structure, product offerings, distribution network and customer support.
According James Bucki the competitive advantage that can be gained by companies through IS/IT outsourcing is operations are run out of control should be considered for outsourcing. The departments that have evolved over time and is not controlled and not managed properly will lead to outsourcing. In addition, the company outsourcing can bring better management skills to Royal Bank of Scotland of what otherwise will be provided. For example, an information technology department that's has so many projects, not enough staff and not enough budget that far exceeds their contribution to the company. Outsourcing contract will...

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