It is common knowledge that most tasks can be performed “in-House” or “Outsourced”, but there is another alternative. At First Consulting & Administration, Inc., our flexible approach to regulatory assistance including product development, filings, risk management and other compliance consulting is much better described not as outsourcing – but as Co-Sourcing.
With Co-Sourcing clients maintain a role in the process at whatever level is most appropriate for the specific company and project. In some cases, an insurer may only provide required officer signatures with First Consulting completing all other functions. For other projects, First Consulting may only perform specific sub-tasks, such as the completion of a SERFF filing, while the MGA handles all product development and answers all objections. The point is that with Co-Sourcing, First Consulting provides the specific services and tasks needed and shares with the organization’s staff in the completion of the project or function.
What is the difference between Outsourcing and Co-Sourcing?
Outsourcing transfers the entire responsibility for the completion of certain of functions to an outside party vendor or consultant.
Co-Sourcing involves both an organization’s internal staff and the outside vendor or consultant in the completion of selected functions.
In some situations, outsourcing of certain tasks or functions may be the best alternative. An example might be when it is necessary to gather information without revealing an entity’s identity. However, outsourcing is not without its challenges. Consider a few of the issues that may be associated with outsourcing compliance functions.
At times, the organization’s priorities may not be clearly communicated to and understood by the outside consultant.
Anoutside consultant may make decisions that, while sound decisions and based upon what the consultant believes is in the client’s best interest, are different decisions than the TPA’s executives and managers would have made.
• At times, the organization’s priorities may not be clearly communicated to and understood by the outside consultant.
• An outside consultant may make decisions that, while sound decisions and based upon what the consultant believes is in the client’s best interest, are different decisions than the TPA’s executives and managers would have made.
• Since completion of the project is totally in the hands of the consultant the client gives up control.
• Since entity personnel are not involved when a project is outsourced little, if any, knowledge is retained within the organization.
The challenges associated with outsourcing and other issues often create inertia in many organizations who might otherwise consider looking for third party assistance with compliance and regulatory matters. However, these same organizations often struggle with the challenges of relying solely on in-house provisioning of such functions.
• The demands upon the regulatory and compliance or product filing staff is rarely uniform. Management is faced with the difficult choice of staffing for peak demand, and this over-staffing, or staffing at some lower level, and thereby ceding a degree of response and service levels.
• Because many regulatory and compliance functions are infrequent, and may even occur only once in year or less, in-house operations often lack the economics of scale to develop the in-depth knowledge and streamlined methods.
• Because of limited contacts, in-house regulatory and compliance associates may not develop the relationships with regulatory staffs that personnel of a third party performing more limited tasks on behalf of numerous clients are able to develop.
• The regulatory and compliance functions of insurance entities require specific knowledge and experience. Often the departure of a key in-house staff member can have devastating results.
The Co-Sourcing Alternative
Co-Sourcing regulatory and compliance functions with First Consulting can address many of the challenges, while offering additional benefits unavailable with either of the unilateral approaches (in-house and outsourcing). Briefly stated, Co-Sourcing with First Consulting involves the deployment of both in-house and outsourced resources in a manner that effectively leverages expertise and resources. The actual split between in-house and First Consulting resources is totally flexible. Subject only to third-party requirements, such as the fact that once a SERFF filing is started all responses to a regulator must come from the same party, the actual combination can be almost infinitely varied for each client and project.
Co-Sourcing with First Consulting allows compliance professionals to maximize their efforts by delegating specific sub-parts of the total function. Yet, in-house personnel maintain control of all projects.
Co-Sourcing with First Consulting also resolves the staffing level dilemma. After a working relationship is established, First Consulting is quickly able to respond to an organization’s unique needs and requirements. With First Consulting available to assist with peak workloads, clients do not need to choose between staffing for such situations or missing opportunities. Since in-house personnel are involved in any project that is Co-Sourced with First Consulting, it is easy for the staff to learn as the work progresses. Knowledge does not remain solely with an outside consultant, as it may when work is outsourced. Equally important, Co-Sourcing with First Consulting can provide the specialized knowledge that is needed to complete a unique or specific project.
Co-Sourcing regulatory and compliance assistance including product development, filings, risk management, and other compliance research and consulting with First Consulting offers benefits that cannot be obtained from any other approach. Co-Sourcing is flexible and can be customized to the specific needs of each client and project. Discover the synergies and new capabilities that result from Co-Sourcing.
First Consulting & Administration Staff