Setting Standards for Outsourcing

Vivienne Sullivan020 7469 1114

viv.sullivan@navigantconsulting.co.uk

Setting Standards for Outsourcing

Benchmarking

Role of the Financial Services Authority (FSA)

Monitoring Supplier Performance - Key Areas

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

FSA’s risk based approach

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

Benchmarking

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

‘The tool for assessing the effectiveness and efficiency of service provision to protect the investment of the sourcing strategy’

Policy and Accountability

Selection of Supplier

Agreement with Supplier

Monitoring

Contingency

Sharpening your organization’s efficiency

Monitoring Supplier Performance - Key Areas

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

Policy and Accountability

Selection of Supplier

How will this be assessed?

References Benchmarking Navigating pathways to success

Which criteria should be employed when assessing the appropriateness of a supplier?

Competence Integrity Financial Stability

Ensure that the terms of the agreement are clear to both parties.

Agreement with Suppliers

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

Monitoring

Meeting uncertainty with preparation

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?

o Reviewso Auditso 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?

Contingency

The contract is terminated?

The service can no longer be provided?

Innovative solutions for pressing needs

Avoid Over-reliance

How adequate are the company’s plans to continue operations if:

Summary

Benchmarking

FSA Regulation

Monitoring Supplier Performance

Presentation