This document discusses an offshoring program and provides an overview of the key considerations and approach. It outlines the main business drivers for offshoring such as reducing costs through lower salaries and premises costs. It then presents a high-level approach involving a transfer opportunities study, execution/transition phase, and ongoing implementation follow-up and optimization. Some of the main challenges discussed include choosing the right target location, developing a clear strategy, identifying all transfer opportunities, ensuring a smooth transition of processes, and recruiting and retaining skilled resources in the offshore location. Success factors center around thorough planning, clear communication, consistency in the target operating model, and change management.

1. Offshoring
Relocation opportunity study, execution and oversight
Stephanie Baruk sbaruk@chappuishalder.com

2. AGENDA
1
2
3
4
Business Drivers of an Offshoring Program
High level approach
Key Challenges and Success Factors
Appendix: Focus on the methodology

3. BenefitsBusiness drivers
 Reduce significantly salaries (up to 55% depending on location) and premises costs (up to 60% depending
on location)
 Being granted with specific Tax incentives
 Achieve economies of scale
Cost reduction1
Business Drivers of an Off-shoring Program
 Take advantage of the program to homogenize and standardize processes in both locations
 Improve efficiency of the processes and redeploy workforce in onshore location
Process standardization
and improvement
2
 Focus on core competencies in the onshore location: retained staff focus on “value‐add” activities
 Establish or reinforce a local presence
 Implement a “multi‐tasking” resources pool and create synergies in the offshore location
 Create a shared services center able to assist several countries & business lines and more flexible/ agile if
volumes increase
Optimization
of competencies
3
 Set up a “Follow The Sun” organization with overnight coverage
 Comply with specific BCP requirements (According to the FED US bond settlements activity has to be able to
settle, clear & close out from a location >100 miles from the main processing center)
 Ensure constant back up and full business continuity
Coverage extension4
3

4. Partial off/near
shoring potential
Partial off/near
shoring potential
Off/near shoring potential
Overview of Functions Potentially Transferrable within an Operations
Department
Sensitivity vs. Proximity matrix Methodology used
Based on this analysis teams are identified as fully or partially near/off-shorable
10%0% 30%20% 50%40% 70%60% 90%80% 100%
10%
0%
30%
20%
50%
40%
70%
60%
90%
80%
100% Sensitivity
Proximity
Sensitivity
Proximity
Team were categorized according to several aspects indicating
proximity needs:
 Client facing
 Physical proximity
 Shared time‐zone
 Language skills
 Cultural Proximity
4
Teams were categorized according to several aspects indicating
business sensitivity:
 Legal/regulatory restriction
 Specific stakeholders requirements
 Specific staff skill requirement/labor market offering at off/near‐
shoring location
 Application sensitivity
 Operational risk level
 Complexity of tasks
Capital Market Ops
Corporate Banking Ops

5. AGENDA
1
2
3
4
Business Drivers of an Offshoring Program
High level approach
Key Challenges and Success Factors
Appendix: Focus on the methodology

6. High Level Approach of an Off-shoring Program
6
Business Case
 Target location choice
 Near vs. Off location
 Pool of resources availability
(specific expertise…)
 Savings (base salaries, premises, tax
incentives…)
 Expected savings & ROI
 Cost reduction target
 Return on Investment
 Strategy definition
 Global vs. Regional
 Coverage strategy (Same time zone
vs. worldwide coverage: ”Follow The
Sun”)
 Hub/ Regionalization
 Number of waves to be
implemented
 Affected perimeter
1
6 weeks*
Transfer Opportunities
Study
 Identification of transfer
constraints
 Operational risks (process stability,
automation level, function
sensitivity)
 Specific expertise required and
related recruitment issues
 Critical size
 Regulatory constraints
 Proximity needs with other
units/departments or clients
 Business case validation
 Synthesis of the functions to be
transferred
 Scenario building and target set up
choice:
• Functions to transfer
• Choice between near shoring or
offshoring
• Estimation of the overlap period
required
• Calculation of the project costs and
related savings
 Definition of different
Implementation phases
2
3‐4 months*
Implementation Follow‐up,
Optimization & Oversight
 HR strategy definition
 Onshore location: retention of top
performers
 Offshore location: assessment of the
staff turnover and identification of
retention strategy
 HR policy review (Holiday policy…)
 TOM optimization
 Improvement of communication
between off shore and on shore
location
 Workload optimization: as‐is
analysis and identification of
opportunities for process
improvements
 Workflows and systems
enhancement
 Optimization of synergies in both on
and offshore locations
 Performance monitoring
 Satisfaction study: evaluation of
team performance on a regular basis
and identification of potential issues
, quick wins and long term
remediation actions
 Define the escalation process
 Track the realization of the business
case
4
>>>
Execution/Transition
Phase
 Target organization
 Definition of Target Operating Model
(Governance, org. charts, P&P, SLAs…)
 Definition of TOM KPIs
 Project Management
 Project Monitoring
 Savings & costs monitoring
 External & internal communication
 Dedicated meetings with affected staff, HR
& Managers (and design of RIF matrix)
 Press release
 Recruitment
 Posting of job offers (internal & external)
 Hiring process (rounds of interviews, final
approver ...)
 Regional organization charts (solid vs.
doted reporting lines)
 On‐boarding
 Task force set‐up including Logistics, BCP,
IT, Security and HR
 Training
 Definition of a training plan for each
department (e.g. specific content, active/
passive shadowing) & training material
3
1 year*
* Timing for information only as it may vary depending on the project’ scope

7. AGENDA
1
2
3
4
Business Drivers of an Offshoring Program
High level approach
Key Challenges and Success Factors
Appendix: Focus on the methodology

8. Key challenges and success factors
Business Case
8
Key Success Factors identified and proposed by CH&CieChallenges Shortfalls
 Deeply analyze key indicators of the country: staff cost, O&P cost
political stability, level of workforce education, languages spoken,
quality of infrastructures, difficulty to travel (visa…)
 Have a good overview of regulatory and legal constraints
 Analyze work market depth
 List the key competencies and specific required expertise
Target location
choice
• Difficulty in finding candidates with desirable
background and skills
• Salaries ending up higher than expected
• Legal issues due to cultural differences (max.
working hours…)
• Additional constraints due to very high data
protection (Singapore)
• Training issue due to specific visa requirements
Business Case
1
Transfer Opportunities
Study
2
Execution/Transition
Phase
3
Implementation Follow‐up,
Optimization & Oversight
4
 Ensure that offshoring strategy to be established is a real leaver
of the whole business strategy
 Have a very clear overview of the offshoring strategy to be
implemented
Strategy assessment
• Offshoring strategy not in line with overall
business approach
• Lack of clear strategy overview
 Ensure a proper current state assessment
 Define appropriate performance measures
 Assess qualitative & quantitative benefits
 Check the organization “readiness “
Feasibility study
• Organization which is not ready to support a
significant transformation initiative
A
B
C

9. Key challenges and success factors
Transfer Opportunities Study
9
Business Case
1
Transfer Opportunities
Study
2
Execution/Transition
Phase
3
Implementation Follow‐up,
Optimization & Oversight
4
Key Success Factors identified and proposed by CH&CieChallenges Shortfalls
 Spend time to design the overall target operating model and get the
buy‐in of all key stakeholders
 Take advantage of time zone differences (‘Follow The Sun’)
 Push end‐to‐end processes instead of tasks
Consistency and
efficiency of the target
operating model
• Offshore teams performing a multitude of
micro‐tasks with no connection between them
• Onshore teams placing orders on a ad‐hoc basis
to offshore teams
 Communicate only with Heads of department and middle mgmt
until the transfer opportunities are identified and validated
 On‐board team leaders at the beginning of the project and
implement follow‐up on a regular basis
Confidentiality and
Communication
• Resistance and lack of cooperation from Middle
Management
 Analyze the existing process entirely to identify potential
stickiness with other departments
 Ensure critical size is reached for each unit, global consistency
and leverage on potential synergies among transferred units
Transfer opportunities
identification
• Constraints not properly identified
A
B
C

10. Key challenges and success factors
Execution/Transition Phase
10
Business Case
1
Transfer Opportunities
Study
2
Execution/Transition
Phase
3
Implementation Follow‐up,
Optimization & Oversight
4
Key Success Factors identified and proposed by CH&CieChallenges Shortfalls
 Explain the various stages of the governance model
 Communicate the criteria to move from one step to another
 Establish clear RACI and kill potential redundancies
Process ownership &
understanding of the
new organization
• A‐team vs. B‐team syndrome creating de‐
motivation
• Difficulty to apprehend who is in charge of what
• Offshore teams perceived as a separate entity
B
 Draft transition check‐list for communication between teams
 Test the readiness of IT systems and assess the quality of the
process documentation early in the project
 Design a transversal training plan
Transitioning processes
without compromising
on risks
• Delays in the roadmap due to unforeseen logistical
issues (visa, space planning, IT connectivity…)
• Lack of documentation & training materials
C
 Build brand awareness through corporate events (buzz)
 Invest in premises and quality of the working environment
 Secure a pool of ‘multi‐tasking’ resources
Recruiting & retaining
CIB‐skilled resources
• Limited brand image in the local market to attract
talents
• Inappropriate planning of the recruitments leading
to delays in the roadmap
D
 Structure with HR a well‐structured, open mobility plan and
anticipate/preempt open positions in advance
 Explain what is going to happen and how you plan to handle it
Changing mindset
• Senior executive delivering conflicting messages
• Fear of losing the job and inability to call into
question (acquisition of new skills)
E
 Negotiation and dialogue with working councils and adaptation of
the communication plan
 Focus change management efforts on middle managers / team
leaders
Keeping the
communication under
control
• Project going public unexpectedly, reputation &
media risks not anticipated
F
 Monitor dependencies with other projects
 Define a unique sponsor to ensure the lead of the project
 Set up a project structure with frequent committees,
comprehensive project tools & an escalation process to ensure
alerts are quickly identified
Suitable governance
• All dimensions of the project (process,
organization, time, cost, HR, communication, IS,
etc.) not properly monitored
• Issues not escalated
A

11. Key challenges and success factors
Implementation Follow-up, Optimization
& Oversight
11
Business Case
1
Transfer Opportunities
Study
2
Execution/Transition
Phase
3
Implementation Follow‐up,
Optimization & Oversight
4
Key Success Factors identified and proposed by CH&CieChallenges Shortfalls
 Plan in the project a reorganization of onshore and offshore teams
after the transfers (optimization phase)
 Strengthen the headcount monitoring process globally
 Agree on conversion ratio (Offshoring In – Productivity Gain) and
monitor their evolution over time (underlying action plan)
Delivering the business
case ROI
• Return On Investment not delivered in many
cases
• Late detection of hidden project costs
• Underestimation of exit costs
• Project changes (de‐scoping) not factored in
A
 Assess teams performance on a regular basis (off shore location)
 Ensure that off shore location set‐up is fully up & running (no
duplicated tasks between locations or tasks still performed by on
shore site)
Assessment of strategy
effectiveness
• Under performance compared to initial
expectation
• Poor level of services quality (complaints from
clients)
• Onshore set‐up overwhelmed due to partial
take over from new platform
C
 Review on shore and off shore HR strategy (retention packages,
review of working conditions if conflict with local culture…)
Appropriate
HR Strategy
• High turnover in off shore location (cultural
issue…)
• Resignation of high potential staff in on shore
location
B

12. AGENDA
1
2
3
4
Business Drivers of an Offshoring Program
High level approach
Key Challenges and Success Factors
Appendix: Focus on the methodology