Research & Thoughts

Keeping the Lights On: Creating a Source of Competitive Advantage in Financial Services

Q&A with Capco Partner, Farzine Fazel

Sourcing. Is yours providing access to cutting edge expertise? ‘Mess for less’ and ‘lift and shift’ are off the sourcing agenda. The ‘new sourcing’ provides clients with a clearer focus on what they really exist to do and a measurably increased ability to do it better. Find out more.

Capco Managing Partner Farzine Fazel reflects on some of the key changes, expectations and opportunities that drive the sourcing debate; and on how Capco’s own Sourcing Offerings are well placed to create long-term value for clients.

How is sourcing changing from a client perspective?
Farzine: The big shift is this: ‘sourcing’ used to be synonymous only with outsourcing - exclusively. And that very often meant offshoring, which was substantially a labour arbitrage issue. Make no mistake, this is not an issue of semantics. Today, a holistic offer such as Capco Sourcing combines a set of propositions going from implementations of complex packages all the way to IT or process outsourcing. It is all about helping our clients in a risk sharing approach, delivering projects in a more cost effective context.

So what makes good sourcing?
Farzine: Good sourcing is a combination of access to the right levels of expertise, at the best cost, as well the delivery capability and methodology to take the problem away from the client, while committing to delivering final results. The days are gone when the only show in town was labour arbitrage or “best effort” to deliver an engagement. Our clients are looking for the best skill set for the job, but also, they are clearly saying “help me in delivering a project, take the risk with me”. That means looking at a continuum of expertise, rather than a one size fits all approach.

What are clients looking to achieve from sourcing? Is there still an element of ‘lift and shift’, or have lessons been learned from the ‘first wave’ of outsourcing?
Farzine: I think the key realisation is that problems need to be solved, not simply removed physically to a different location. ‘Lifting and shifting’ and ‘out of sight out of mind’ are discredited. Too many profound problems have come back to haunt people who thought that cutting the labour bill by increasing the distance was the only answer. Clients now want approaches to sourcing that will transform their current shortfalls and raise their game, as well as reduce their expenditure. It is all about a value chain and value creation rather than pure cost cutting in isolation.

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