Setting Standards for Outsourcing

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• Setting Standards for Outsourcing

Vivienne Sullivan 020 7469 1114 viv.sullivan_at_navig
antconsulting.co.uk
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Setting Standards for Outsourcing

• Role of the Financial Services Authority (FSA)

• Benchmarking

• Monitoring Supplier Performance - Key Areas

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Role of the FSA

• Financial Services and Markets Act 2000
• All mortgage and general insurance firms must
  comply
• Deadline for compliance is January 14th 2005
• Applications to be in 6 months prior
• FSAs risk based approach

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Role of the FSA - Outsourcing

• Outsourcing in the London Market
• Identified as a significant risk
• Professional Advisers
• And the FSA sets the parameters

Connecting clients with solutions
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Benchmarking
The tool for assessing the effectiveness and
efficiency of service provision to protect the
investment of the sourcing strategy

• Establish clear, achievable objectives for
  benchmarking
• Make benchmarking a philosophy, not an exercise
• Adopt an incremental benchmarking approach to
  help realign performance to strategic objectives
• Go for internal and external comparisons
• Consider which metrics make for the most valid
  comparison of service performance and stick to
  them

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Monitoring Supplier Performance - Key Areas

• Policy and Accountability
• Selection of Supplier
• Agreement with Supplier
• Monitoring
• Contingency

Sharpening your organizations efficiency
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Policy and Accountability

• What is the firms policy on the use of
  Outsourcing and third party providers?
• Who is responsible for managing this relationship
  between both firms?

Solutions to build a sustainable future
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Selection of Supplier
Which criteria should be employed when assessing
the appropriateness of a supplier?

• Competence
• Integrity
• Financial Stability

• How will this be assessed?
• References
• Benchmarking

Navigating pathways to success
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Agreement with Suppliers
Ensure that the terms of the agreement are clear
to both parties.

• Provide an appropriate SLA
• Perform periodic reviews
• Determine how best to use auditors and their
  findings
• Make the relevant information accessible to the
  FSA
• Establish adequate reporting lines

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Monitoring

• How will you ensure that the service provided
  continues to meet goals and objectives?
• How will you ensure that effective systems and
  controls are maintained?
• Reviews
• Audits
• Risk Assessment Forms
• How efficiently are your processes and controls
  adjusted to reflect new or changing risks or
  operational deficiencies?
• To what degree are clear and measurable
  objectives set for your staff?
• To what extent do you receive/request timely,
  relevant and reliable reports on progress against
  your business objectives and their related risks?

Meeting uncertainty with preparation
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Contingency
Avoid Over-reliance How adequate are the
companys plans to continue operations if

• The contract is terminated?
• The service can no longer be provided?

Innovative solutions for pressing needs
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Summary

• FSA Regulation

• Benchmarking

• Monitoring Supplier Performance

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Presentation