Third-Party Contract Operating Model

Client Challenge:

The client had recently established a centralised, ‘arms length’ internal service provider organisation model to meet regulatory ringfencing and Operational Continuity in Resolution (OCiR) requirements. The relationship between the service provider organisation and the rest of the Bank is governed by an inter-group agreement contract structure.

Key Challenges:

  • Third-Party Contract Management
    • The ServCo inherited a significant volume of Third Party contracts into its structure. The correct processes and procedures to provide effective oversight and management of the relevant risk was required
  • Contract and Commercial Management
    • The client required support in developing and implementing the Target Operating Model for Contract Management, on a global basis, and managing the accompanying complex regulatory requirements.

What we did:

  • Industrialised process to obtain, review and classify the relevant Third Party Agreements built
  • Through close engagement with relevant service owners built key contract repository, including key contract information, services and the various service recipients,  building impact statements for each. Classified each contract into a service tower and associated costs / benefit forecast was built
  • Built process to assign dispositions for each agreement to support the overall objectives of the programme; novation, termination, managed agency, Rights to Use (RTU’s)   
  • Validated and assured benefits delivery by holding new outsourcing supplier to account by:
    • Building an agreed plan, by TPC and by disposition, to support overall programme delivery
    • Building contractual provisions to build joint accountability for benefit delivery

Outcomes & Results:

  • Produced Deliverables and Obligations tracker to drive contractual compliance across the Group, as well as Third Party flow-down obligations and requirements tracker for in-scope Third Parties
  • Implemented Contract Mapping ID process to support regulatory Service Mapping requirements. This was critical in order to meet Bank of England commitments in 2018
  • Developed the Commercial Risk Plan for commercial and contractual risks arising from new service provider structure
  • Process Maps and Contract Management Handbook for the ServCo Contract Management Target Operating Model (IGSA management, Relief / Dispute / Change management) driving process efficiency, optimisation and automation
  • Negotiation of complex local regulatory amendments
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