High Productivity Outsourcing

There is a major shift in the market towards managed services with output based pricing - where by commercials are linked to defined outputs not just effort.

Productivity improvements are assumed in these contracts, but in reality these ‘productivity improvements’ are in fact efficiency improvements.

Efficiency improvements are achieved in a traditional outsourcing contract by the constant ‘shift-left’ reduction of skill levels over the contract. Resulting in knowledgeable teams during the transition phase, but by the end of the second year at a time when business changes are starting to have an impact on their effectiveness, the team are significantly de-skilled.  Whilst this business model delivers cost savings it also brings in ‘factory type’ efficiencies, with little focus on future changes. 

Our High Productivity Outsourcing (HPO) Model is based on three pillars – client-specific academy, client-centric innovation labs and performance guarantees. The model is designed to root out the underlying causes of low productivity in typical offshore outsourcing – namely a rookie workforce (once left-shift kicks in), an order-taking mindset, and an absence of skin-in-the-game.

The HPO model makes us true partners for our clients – expert teams with an innovation mindset working collaboratively with clients, incentivized to deliver business outcomes.

Overview

HPO is a future-proof model that enables banks and financial institutions to channel investments in a fully optimised way that results in building up of banks capability for ‘Heavy lifting’ of IT/IS transformation programs.

In today’s rapidly changing digital context, banks and financial institutions future proof themselves through cutting edge technology whilst maintaining the TCO, at a level aligned to maximising shareholder value. Unlike traditional outsourcing approaches “HPO leads through ‘real’ Outcome and Output based productivity” rather than the traditional route of assessing productivity – through inputs.

We have created ‘shared destiny’ environments in which both Polaris and our clients have a vested interest in the success of each and every engagement.

Approach

Polaris is placed to help banks and financial institutions above and beyond other outsourcing service providers.

As organisations have become increasingly mature in terms of their outsourcing strategies, substantial amounts of low complex (typically 'run-the-organisation') activities have been transitioned to low cost locations. This necessitates outsourcing providers and organisations to find innovative ways of delivering year-on-year savings that the organisation demands from outsourcing.

In traditional resource-centric outsourcing models, vendors tend to focus on maximising the number of resources deployed in an engagement as this drives the growth of their business. Vendors have a preference for less automated, simple work that can be carried out with large teams in low cost locations. This focus directly conflicts with that of the client organisation for leaner, more productive teams delivering greater throughput.

As a challenger to 'traditional outsourcing' providers Polaris is focussed on driving productivity rather than expanding or maintaining resource numbers.

This calls for Higher Productivity Outsourcing!

The foundations of HPO that enable greater productivity are as follows:

1. Client Academies

When establishing these Academies we work directly with clients to create Orientation, Business and Technology awareness and system-specific training courses. Throughout the life of an engagement, resources continue to be trained and assessed to ensure deep knowledge of the client’s business, culture, processes and systems. Polaris employees are experienced both in Banking and in IT and with an average 7 years industry experience (twice that of many IT outsourcing providers), providing a solid base for knowledge transfer and update. 

2. Innovation Labs

Client-centric labs are established on themes driven by client priority such as Digital Banking, Payment and Risk/Regulatory. The main focus of the labs is to drive forward looking technology optimisation.

3. Performance Guarantee

In addition to investments in client-centric academies and innovation labs Polaris places a percentage of the monthly revenues received from the client at risk. This ensures that both Polaris and the client have a vested interest in delivery of the productivity improvements agreed.

Benefits Delivered

Improving productivity in Outsourcing engagements is the only means by which vendors can realistically deliver the ambitious demands of banks.