Why did American Express outsource to IBM?

Amex is farming out four processing functions, all of which it considers commodities: mainframe processing; mid-tier processing, which includes maintenance of servers for hosting Web functions and office automation; PC desktop support; and the technical help desk for employees. The financial services company will continue to oversee architectural design and application development.

“We did a very surgical process of splitting the responsibilities,” said Mr. Salow, who is also an Amex executive vice president. “IBM is taking over a set of things that are important, but do not create a competitive advantage for the company.”

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