In 2010, Cranfield University published some research which categorised ‘rationalisation and outsourcing services’ into four broad categories; boutique, shop, factory and mall.

A boutique service tends to be highly cus­tomised, have a longer duration and be specific to a particular process. There is an expectation that the service team will be highly experienced in the right domain and will use their own judgment to meet the needs of the end users. In addition, the service team are more likely to be on-site, engaging closely with senior bank technology staff; hiring the right personnel, training the team, balancing workloads, scheduling work, ensuring quality and maintaining employee loyalty.

In a shop service, the short-term deliverables (e.g. a software development or vendor evaluation), will often be performed away from the bank. The service team will have limited interaction with the bank team, fo­cusing mainly on requirements and quality.

A factory service is used to outsource well-defined functional processes such as PC installation, network maintenance, security management and so on.

The mall service has been the traditional out­sourced service, including support such as first line helpdesk and system health-checks. As with call centres, contact with users is high, but the provider generally has a limited repertoire of responses to address their requests.

Although each service has its merits, in my experience the boutique is by far the most coveted. Even when a customer believes that they require a lower-level service, upon closer examination of their needs and business goals, in reality the only way to satisfy their requirements and expectations is by engaging a boutique service.

The reason for this is that each client is unique. As simplistic as this may sound, the root cause of the boutique approach’s success is the flexibility that it allows service providers in fulfilling the specific requirements of the individual bank. With every other service offering the actions of the service provider are in some way pre-defined by a set of rules, not formulated according to the needs of the customer, but according to a set of industry norms and /or expectations. As a consequence, when such methods are employed the client can often feel that they are being ‘let down’ even when the service provision is executed perfectly according to the letter of the service level agreement. In my experience, there will always be some detail that a generic approach to service provision will overlook.

The hallmark of a good service provider is one that can recognise the needs and expectations of their clients and create solutions that will suit them (and their customers) perfectly.

Writing this as I head off to ISLA 2012 in Madrid today, I look forward to discussing with my peers, innovative ways of meeting the challenge of maintaining service levels using legacy technologies which continue to run key parts of the banking infrastructure…and why I believe boutique is best!