For many firms, their strategic outsource partners represent the 'heart and lungs' of their operating model.

Outsourcing services and software has become an integral part of the operating model for many segments of the investments industry. Given its prevalence, especially for critical functions, sourcing strategies, provider exposures, oversight models and contingency arrangements are becoming a significant area of scrutiny for the regulator. 

Managing outsource relationships from cradle to grave has become a critical activity to ensure that investment firms gain access to the right services from the right partners on terms that will lead to strategic, operational and commercial success over the long term.  Failure in this regard has the potential to hang as a millstone holding a business back for many years.

The services we deliver in this space are undertaken by Knadel consultants who have deep experience of the market landscape and trends, selection and negotiaion approaches, supported by associates with specialist domain knowledge.  Knadel teams have access to an unrivalled  library of materials and tools which have been tuned and improved across multiple client assignments.  This combination of people, know-how, tools and techniques is the foremost outsource support service within the industry.  

Intro and Value summary
Key challenges

Key challenges for effective outsourcing

There is extensive research on the key challenges faced when executing and maintaining an effective strategic outsouring relationship.  In our opinion, the main areas of focus should be:

  • Have an overarching sourcing strategy
  • Ensure the end to end operating model is understood
  • Set clear expectations of your strategic partner
  • Instill appropriate MI to control and manage the relationship
  • Communicate effectively and constructively at all levels
  • Change will be as big a challenge as 'business as usual'
  • Mechanisms to build a mutually beneficial long term partnership

How Knadel can help

There are a number of areas we can provide advisory and delivery services in relation to outsourcing strategy, selection, negotiation and on-going relationships.

Sourcing strategy and provider options 

  • Develop your sourcing strategy, taking into account your business model, strategic objectives, current operating model, scope options for outsourcing and current outsource relationships
  • Provide advice on market landscape, strenghts and weaknesses of key players within specific sectors, industry trends and strategic considerations

Selecting the right partner(s)

  • Construction of an Information Memorandum / Request for Proposal (RFP) as appropriate, drawing on Knadel databank
  • Structured approach for evaluation of supplier commercial and service offers including rate card and key service term databases.  Construction of financial business cases and rate card scenario models
  • Structured approaches for constructing, executing and recording expert evaluations / due diligence

Contract Negotiation / Renegotiation 

  • Advice on tactics, approaches and market trends in the key commericial, operational and legal aspects of an outsourcing arrangement
  • A structured approach to the negotiation of key commercial terms with familiarity working with all the major commercial law firms active in this arena
  • Extensive market knowledge and proprietary database of Service Level Agreements (SLAs) and Key Performance Indicators (KPIs) for various services, markets, product ranges and jurisdictions


  • Advice sizing and constructing oversight functions and governance arrangements supported by models tested in client organisations
  • Construction of Service Level Agreements, Key Performance Indicators and Service Credit Mechanisms
  • Operational preparations for transfer of services (in-house/external or change of supplier)
  • Migrating large scale and complex books of business

Operation and improvement

  • Independent reviews of strategic outsource relationships and a firms overall sourcing strategy 
  • Detailed benchmarking of service levels, fee arrangements and key commercial arrangements
  • Responding to regulatory changes affective oursource provider management and contingency arrangements
Value knadel can bring

Value Knadel can bring

Knadel consultants have an industry leading level of expertise in assisting clients procure and manage outsource relationships drawing on the experience of numerous significant market leading deals.

Covering all services and all client market segments we can provide knowledge and assistance from the strategic - what would be the most suitable operating model, to the most operational of preparations to execute or transfer an outsource relationship.

Supporting our operations within the outsource arena we operate a Supplier Management Forum which is open to management within client organisations holding responsibility for Operations or with oversight responsibilities for outsource service management.  This practitioner lead peer group provides a valuable source of networking and peer opinion on topical matters within the industry.