Introduction:

This case study describes our role in improving the material outsourcing arrangements for a leading, industry-owned business that delivers critical settlement, processing, and data solutions to global financial markets

Augmenting client and advisor teams, our engagement helped the client deliver a more efficient way to progress both sole source negotiations with the incumbent and parallel preparations for a competitive sourcing process to explore other options.

This case study highlights the value of close cross-functional coordination that the client placed in progressing the action as well as the kind of integrative support that’s needed to make that work efficiently.

The Client's Challenge:

The client was transforming its core platform and needed to significantly update the long-standing and material IT outsourcing relationship underpinning it. A programme already under heavy scrutiny from their stakeholders and regulators across multiple jurisdictions.

Their main challenge was whether the long-time incumbent should feature in its target state given its value for money was now in question, or more seriously considering more cost-effective alternatives.

A challenge that was complicated by (a) the associated risks of making such a change along with the aversion in the business to it, (b) gaps in key knowledge of some aspects of the outsourced operation that may increase that risk and (c) resource contention given the priority of their ongoing transformation activity.

What We Did:

Engaged to help the client and their advisors to accelerate parallel contracting and RFP preparation activities, our key activities included:

• Collaborating across functions and with external advisors to seamlessly integrate complex and diverse requirements

• Conducting a thorough evaluation of the existing contract and assessing the current situation to identify areas for improvement

• Assisting in developing a robust business case and designing a structured decision-making process with well-defined criteria that aligned with the client’s strategic objectives

• Expediting the preparation and management of detailed contract artefacts, RFPs, and due diligence processes to support more rigorous alignment and decision-making

• Simplifying and strengthening contractual third-party risk management and oversight provisions across both activities

• Strategic sourcing management of the RFP preparation activity while providing additional deal assurance to the parallel contracting and negotiation processes

• Assisting in presenting considerations to the decision-makers and the board

• Ensuring appropriate handover to the client upon successful contract signature

The Result:

The outcomes were:

• Agreement of an updated outsourcing deal that is more closely aligned with the envisaged target state while strengthening service commitments and reducing associated risks

• Improved third-party risk oversight and management commitments as part of the agreement

• Reduced overhead and distraction for the existing change activities and teams

• Reduced advisor fees as a result of more efficient validation of requirement detail across all areas

• Fully drafted RFP artefacts incorporating the contract and TPRM requirements for the client to leverage into other future sourcing activities

Tags:

#FinancialServices #CriticalInfrastructure #Transformation #Sourcing #Contracting #Negotiation