• Bodo Schaefer
  • Published: 08 February 2023


The amount of effort financial institutions are facing to comply with regulations while enabling data-driven business models and modernizing infrastructure and architecture, is increasing at a steady pace.

On top of that, maintaining large organizations while running major change-the-bank (CtB) projects with substantial operational and management overheads (for budget calculation, onboarding, offboarding, training and vendor management) is further pressuring capacity and costs.

To address these mounting issues, financial firms are switching to bespoke and flexible change sourcing models which help them manage their demand for external resources cost-effectively.

In a nutshell, change sourcing fulfils the ongoing and/or ad hoc resource demand for CtB projects with speed, flexibility, convenience and at a low cost, with savings potential of up to 40 percent. This blog looks at the typical phases of a change sourcing initiative in more detail. 

1: The 3 Phases of change sourcing

Phase 1: Demand planning

Phase one starts with demand planning for the overall CtB organization followed by skill, profile, role and location analysis to enable clear budgeting for the ‘change pool’. This would typically be done by the change sourcing provider who then proactively manages the ad hoc resource demand for projects, short term engagements and urgent prioritizations via the change pool. At the same time, resources are trained and onboarded according to the specific needs and requirements to provide seamless transition and onboarding while transfers between projects within the same institution reduce friction and loss of knowledge.

For the financial institution this approach reduces the reaction time and management overheads for change requests, urgent prioritizations and external vendor management and onboarding. It also enables the creation of split roles for tasks such as project management (leading to PPM) that can be delegated in ‘fractional’ full-time equivalent employees (FTEs), reducing the overall headcount.

Phase 2: Resource allocation and onboarding

A key ingredient of a change sourcing model is to ensure a skill-based profile match and allocation to prioritized tasks and projects. Therefore, team and project know-how would be gathered, formalized and provided within the change sourcing pool to enable seamless onboarding and adoption of new tasks. For classic PMO tasks (such as management reporting, budget calculation, progress tracking) existing or adapted frameworks can be used to enable the organization to scale and industrialize change initiatives.

Phase 3: Ongoing delivery oversight

In parallel with the ongoing projects, it is important to maintain an oversight of the resource requirements against the initial budget, to facilitate a flexible resource capacity at any time and at short notice. This enables easy flex-up and down for the organization’s activities. 

The financing can be handled flexibly for the institution with a fixed base share of services being committed and a flexible pool being billed at year-end against the actual consumption. This helps to further reduce management and budget overheads and allows the organization to focus on the work and deliverables required to successfully complete their projects within the committed deadlines.

To sum up, based on our experience, the unique flexibility offered by an external ‘change pool’, tailored and dedicated to a financial firm’s long and short term objectives, brings not only reliable speed and convenience, but also substantially reduced costs, while ensuring project success. Ultimately, organizations benefit from improved compliance, modernized infrastructures and future-proof operating models which open doors to innovation. 

Case study: Change Sourcing deal involving 400+ resources over a multi-year period

Capco successfully conducted a Change Sourcing initiative for a large global financial institution, bringing in 400+ specialists, over eight years. As a result, the bank benefitted from reducing costs across the change portfolio by more than 40 percent. This was achieved through streamlining administrative efforts, providing rapid budget and resource flexibility and industrializing repetitive change tasks.

Over 1100 Capco consultants are already delivering Change-as-a-Service for our clients, using a ‘battle-tested’ operating model. To find out more about how Capco’s Change Sourcing solutions can help your institution, contact us to discuss the opportunity and potential implementation.