Financial Services Steering Committee
3rd March 2011
2010 was undoubtedly a testing year for everyone involved in the financial services industry, with tighter budgets and greater scrutiny on spending making life difficult for all concerned.
This Steering Committee, chaired by Steve Briggs, NOA Board Member and Head of Strategic Partnerships at Co-operative Financial Services, was brought together by the NOA with the premise of being a “think-tank” to discuss, develop and influence ways for the financial services sector to better manage outsourcing in 2011 and beyond.
Key Points:
• Move towards output based contracts rather than transactional. Regular SLA checks tie in profit and value added.
• Although there seems to be a constant reference to cost cutting in the industry, suppliers are not really willing to compromise on price.
• Flexibility in contracts is very much in demand due to market uncertainty and advances in technology e.g. Cloud.
• Regular benchmarking and contract reviewing is becoming more commonplace during certain stages in the contract.
• Transformational contracts are linked with the need for transparency.
• Emphasis on the importance of collaborative partnerships in the financial sector. Human relationships are often overlooked in outsourcing compared to the cutting costs. Specific workshops are encouraged.
• Focus in the industry on shorter contracts which are more specific to their solutions. For example, risk management models and high-risk projects.
• Output based model in multisourcing can be difficult as there is no clear overall end-to-end process.
• Success of contractual outcomes should also be based on overall efficiency.
• It can be hard to pin-point ‘blame’ with interdependent contracts if something goes wrong - litigation often needed.
• Variety of relationships is key in outsourcing. It is important to spread out risk throughout a multitude of contracts and exit strategies are vital.
• Service integration is important when multisourcing. An overview is vital as long as it’s in-house.
• Supplier categorisation is a must and similarities are needed between all approaches regardless of the outcome.
• Goal sheets always lead behaviour. Contracts which are tied to the profit of a customer tend to promote a collaborative partnership.
• Cultural fit is essential especially during the procurement process. Cultural fit is hard to evaluate and measure but is vital for successful collaboration.
• Concerns with Cloud regarding data, ownership and legislation / regulation.
• Transitional changes are a challenge – Organisations dealing with changes in legislation and cutbacks.
• Lack of exit strategies are a huge risk for companies. Organisations need to ensure that they these are in place in their contract during the initial stages.
• Innovation needs to be contractual and measured regularly in context with changes in the industry.
• Offshore becoming a risk due to changes in the Bribery Act however this is usually covered in policy risks.
Attendees:
Steve Briggs – CFS / NOA, Paul Corrall – Sourcingfocus.com, Andreas Giannopoulos - Hudson & Yorke Ltd, Will McAllister - Aegis Global, Marcel Horst - ExcelSource Ltd, Rob Sheldon – DWF, Julian Round - Lloyds Banking Group, Mark Prinsley - Mayer Brown, Sanjay Pritam – RPC, James Phythian-Adams – RPC and Mike Brett – DataArt.
