GFI outsources non-core software development offshore

Inter-dealer broker and technology developer GFI has launched a pilot project to explore the opportunities of moving some of its IT development offshore. The move largely applies to non-core development work.

The broker is beginning with two development projects, in conjunction with Syntel, which does most of its work in India, said New York-based GFI chief information officer Russ Lewis. US-based Syntel has sites in Charlotte and Tennessee.

Lewis said that with 20 simultaneous development projects underway, GFI’s 130 development staff simply had more work than they could cope with. "There is pressure to get products out in a timely and cost-effective way," he added.

The first test is a New York-based project to develop an end-of-day, check-out service for GFI’s brokers to allow clients to view trades over the Web, upload to their back-office and confirm trade with GFI. The second project, focusing on the maintenance of middle-office, trade capture systems, is being run from London.

GFI and Syntel have worked together for two months, and both projects are still in the analysis and planning stages, which must gain approval before any move to India. The New York project is running ahead of London, which will not see development move offshore for at least three months. Lewis said GFI looked at setting up its own offshore centres, and may yet do so. But this step would not have achieved results quickly enough and requires local knowledge.

Lewis said GFI would consider moving more maintenance of mature products offshore, where it could achieve cost savings of between 25% and 35%. This could see GFI using in-house developers for its own core systems and then using offshore resources to commercialise them for sale. "By lowering the cost of support, we can spend more on development," Lewis said.

He declined to specify other systems GFI may outsource, acknowledging that customers have concerns about the quality of software developed offshore. But Lewis said he was confident there will be no degradation of quality.

GFI’s code will be backed up to a site in Charlotte at the end of every day.