Artha Shastra uses the highly effective Artha Shastra Framework to develop and help implement off-shoring solutions that are designed around the bank's objectives and drivers.
| Issue |
Traditional Approach to Banking Offshoring |
The Artha Shastra Framework Approach |
| Migration of process from the bank to the BPO provider |
All processes, both good and bad are replicated. No value addition from the service provider. |
The Requirement Definition stage of the framework uses the concept of process adjacency to identify and offshore related processes that immediately add value to the bank's drivers. The "good" practices of the bank are improved by incorporating industry best practices. |
| Expectation setting between the bank and the BPO provider |
With limited information about the bank's long-term strategy, the BPO provider typically does not see the bank's "big picture". This leads to misalignments between the goals of the bank and the BPO resulting in constant friction. |
The Delivery Model stage of the framework expects the bank to make a series of informed trade-offs to set expectations with the BPO provider. This rigorous planning exercise forms the basis for formulating SLAs with the BPO and ensures congruence between the bank and the BPO. |
| Transition Planning |
Transition planning only takes into account change management, technology considerations, and risk factors. |
The Artha Shastra framework creates a comprehensive transition plan based on product and market imperatives, change management, technology considerations, risk perception, and vendor maturity. |
| Technology |
Most BPO providers recommend setting up platform BPOs that completely discard the bank's existing IT infrastructure. This approach is disruptive, expensive, and in many cases, inefficient. |
The Technology Enablers stage of the framework addresses wage differentials arising from moving into a lower labor cost environment, and suggests that banks make judicious use of technology and manual processing to get maximum leverage out of offshoring. |
| Organization design, hiring, and training |
People are usually hired using lateral hiring techniques and employees spend a significant amount of time unlearning inefficient practices. |
The Organization Structure stage of the framework extensively plans the organization chart of the service provider in terms of the skills to be hired and the type of training to be imparted to ramp them up. The framework also develops techniques to hire the right candidates from new catchment areas instead of hiring laterally from other BPO providers. |
| Pricing and risk management |
Contracts are usually priced using the Full Time Equivalent (FTE) approach taking historic averages of volume as the basis. Management of risk arising from variations in volume and non-financial factors are not given due consideration. |
The Price Discovery stage of the framework helps price the partnership based on the various trade-offs made by the bank in keeping with their drives. Importantly, the framework addresses and factors in the cost of managing variations in volumes of business and operations and operating risk management. All risk management techniques are adapted from the BASEL II framework for managing operating risks. |
