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: