Implications of a no deal Brexit

The British Government has issued its reports on the implications for business of a no deal Brexit and it does not paint a pretty picture:

  • There are still more than 30 international trade deals to be concluded
  • Research shows preparedness is particularly low in SME’s
  • To date there have only been 40,000 Economic Operator Registration and Identification (EORI) out of an estimated 240,00 EU only trading businesses
  • No deal would have an economic impact of up to -9% over a 15 year period!
  • There will be restrictions and delays at EU borders for freight and passengers leading to a potential impact on “just in time” operations and food imports
  • Admin burden on business could amount to up to £16bn per annum in the absence of a deal
  • There would be tariff increases including 70% on beef, 45% on lamb and 10% on vehicles

The message in this report (which you can read here) is clear: businesses must take action to prepare for the impact of a non deal Brexit. However it is crucial that the government and Parliament comes together to prevent the UK from this scenario from happening.

Talking to our clients, only a few are taking proactive steps to prepare for a no-deal. What is your business doing to prepare?

Retonomy provides European haulage, packaging, legal and business support to ensure its clients are able to minimise the impact of a no-deal. Contact us today for a no-obligation discussion about your Brexit plans.

Challenger bank: When to engage your suppliers

You’ve decided to start a bank, you’ve built the unique offering, your C-suite is on board, and you’ve delivered your initial submission to the Bank of England. The next things to consider are: What’s going to be done in-house and what’s going to be outsourced? When do you engage your suppliers? While systems providers are the focus of many outsourcing efforts, what about your customer services, back office, bank infrastructure and risk controls and audit function? All are candidates for outsourcing.

Retonomy has worked with a number of fintechs and challenger banks, and in each case, the engagement of key suppliers has been critical to the success: engage too soon, you start to burn through cash, but wait too long to save money, and you stand a chance of being delayed in launching the bank. The Bank of England likes to see evidence not just of the plans of engagement but also of the system architecture and credible progress in building the capability.

How to manage your suppliers

Outsourcing requires careful management, and there are two main options: manage internally or use a service integrator? This is a question of scale and a service integrator can work well in large organisations. With multiple suppliers delivering into the same service or product, it is sometimes preferable to have one “throat to choke” by having one supplier lead the delivery. In this case, being removed from the supplier management “coal face” must be a strategic decision rather than a default position. However, in smaller organisations and start-ups, this requires a leap of faith by the founders in the service integrator and can often be more costly than having a dedicated resource internally.

“Planning engagement with suppliers is a challenge for new entrant banks. The length of the application process for a ‘banking license’ can vary, but is almost always longer than the applicant hoped. For a period of time they will need to carry the full operational cost of a UK financial institution without permission to trade. For an entity with limited resources, this expense and the delay in revenues can derail the project.

To try to mitigate this cost, the management team might be tempted to short-cut vendor selection and commercial negotiations and to appoint suppliers at the last possible moment. This lack of diligence is also problematic as it can introduce risk and reduce the quality of the delivery. It may also impact the new entrant bank’s application for a license as they will be unable to evidence effective outsourcing systems and controls to the regulator.

Timing all resourcing decisions, whether recruitment or supplier engagement can make a substantial difference to a new entrant banks chances of success.”
Jof Walters, CEO: Million

Danger to cash flow

Challenger banks suffer from the same affliction as most startups: investment. In banking, investors are reluctant to put cash in too early until they see evidence of the bank spinning up. But until the investment comes in, the bank runs on whatever money (usually the founders’) is available. Of course, this concerns operating cash… the capital needed to support the banking operation is another matter!

This is particularly the case with some of the challengers who have built their offering on technology and whose first round investors tend to be from the tech arena. These investors are used to gaining a return from initial investment, but quickly find that it’s not enough to build the infrastructure needed and nowhere near the capital requirements.

Building a bank is not a cheap business, to date, Tandem has raised more than £110m and Starling more than £64m, with a further £80m needed. Getting the financing wrong can have a considerable impact on the financial health of the bank: Metro recently miscalculated its capital requirements causing a drop of more than 40% in the share price.

Danger to timelines

Getting a banking licence takes longer than expected. Currently it’s taking approximately two years from acceptance of initial submission. Although the process is a defined year from application to decision, we see delays in both the application being accepted initially and also at the decision stage. Applicants are willing to let the twelve month time limit lapse rather than retract their application or be declined. Starting to pay your suppliers too early endangers the viability of the new venture; too late and it could extend the time to granting the licence. And until this point the bank doesn’t make money: it cannot take deposits and cannot start trading.

Without experience in managing suppliers there is also the risk of misunderstanding supplier delivery timescales. Not only do teams often fail to include enough contingency for slippage in the delivery but they also fail to understand how long it takes a supplier to recruit resources, stand up a project team, and set up programme governance.

How to resolve the problem

  • Decide how you’re going to outsource and to who by formulating your Sourcing Strategy and conducting supplier selections.
  • Take a staged approach: work out which has the longest lead time and engage these suppliers first. And build in contingency!
  • If you are going to use a service integrator model, decide which supplier is best placed.
  • In your negotiation, make sure you have sufficient protection, especially in the situation of a decline of licence. It has been known recently for the application be turned down at a very late stage or delayed indefinitely. In this situation, having the ability to reduce the services or cancel the contract with minimum penalties is advisable.
  • Give yourself longer to engage your suppliers than you initially estimate: the engagement and contracting process can become protracted.

Starting a bank is an exciting proposition, and the current dissatisfaction with the high street banks makes it an appealing challenge, but takes longer and costs more than most expect. Making the right choices in sourcing and engaging the right model at the right time can increase the chance of success.

For more information about how outsourcing to Retonomy can help your busines, get in touch or give us a call on +44 (0) 1438300200.

Creating a challenger bank

A leading high street bank needed to set-up a challenger bank. Retonomy was brought in to establish critical supplier functions and consult internally.

The financial crisis had a profound and lasting effect on the UK’s economy – particularly for the banking sector.

With Government intervention at its heaviest for a generation, one leading high street bank was asked to reinvigorate the retail sector by using its own assets to create, then sell off, a challenger bank.

Retonomy was asked to apply its outsourcing expertise, and its specialist knowledge of establishing and managing supplier relationships to help create a new, wholly outsourced, IT function for the challenger bank.

New supplier function, significant risk

Without specialist knowledge or experience of outsourcing IT in the new organisation, the parent company needed to ensure that it realised true value from its agreements. Significant risk existed. It needed an experienced gatekeeper to ensure its partner organisations met their obligations and to guarantee each agreement was implemented and delivered to the expectations of the newly established bank.

With up to a hundred IT suppliers allocated to the challenger bank by the parent company, contracts were passed to Retonomy for it to establish and manage the process by which the new bank assumed control of these agreements, then suppliers were brought on-board to begin implementation.

Retonomy took ownership for contract management, creating the performance management process, the supplier relationship management process, while also acting as the single point of contact for all supplier queries during the set-up process.

Using just a small team, Retonomy maintained control and created a seamless process for delivery of critical IT management systems.

Troubleshooting the supply chain

The process of ensuring that governance of the supplier pipeline was correct relied heavily on close collaboration with the client organisation and the outsourcing partners. The responsibility for oversight, added to a general outsourcing expertise, gave Retonomy an intimate and innate understanding of the project.

This unique understanding of outsourcing meant Retonomy’s role developed from straightforward delivery to a hybrid delivery/consultative role, providing outsourcing and vendor relationship management advice across the new organisation.

Dependable and repeatable processes

Such a high number of suppliers, inevitably, meant a great many agreements; the processes were overseen by the team of the Chief Information Officer at the new bank.

With so many contracts to oversee, the potential for the new bank to become swamped by detail and the administration of varying methodologies became real.

Using its experience of establishing large outsourcing programmes, Retonomy was able to alleviate this potential threat – and to make life simpler for the client – by ensuring the various processes it established were free of extraneous method, straightforward, similar in approach, and easily replicable for the future.

For more information about how outsourcing to Retonomy can help your busines, get in touch or give us a call on +44 (0) 1438300200.

Why conduct a Supplier Portfolio Assessment

Whether to reduce costs, access skilled resources not available in the organisation or to scale up teams rapidly, it is not a light decision to outsource and is usually based heavily in the strategic interests of the company. However over time even with active management, your supplier portfolio can bloat: new suppliers are brought in for small pieces of work, contracted suppliers are ignored, the supplier mix does not keep up with changes in strategy. All this leads to whether you are meeting your sourcing objectives becoming opaque.

A couple of points that often escape peoples notice:

  1. Each supplier requires internal overhead regardless of the size of the contract,
  2. A disparate set of suppliers risks missing opportunities for synergy, savings and increased negotiated benefits.
  3. Remember that Adobe subscription you took out three years ago, used once and forgot to cancel? The same could be happening in your organisation without your knowledge.

How can you redress the balance?

Retonomy conducts “supplier portfolio assessments” for its customers to bring clarity back to the supplier ecosystem. Whether looking at your entire supplier portfolio, a particular division or service – conducting this review can gain efficiencies, cost savings and productivity improvements.
Our analysis includes:


We find out how much you’ve spent with your suppliers, what price changes have taken place during the life of your contract and the gap between what you were expecting to pay at the beginning and what you are paying now.


For each of your suppliers, what are the primary services being provided and are there any overlaps with other suppliers?

Key contract terms

How long is your contract for, has the initial term has expired, what are the termination clauses?

From this analysis, we provide a report including where you’re spending your money, any identified overlaps in suppliers and redundant contracts.
Once we’ve collated the information, in consultation with you we conduct a deep dive into your top 3 – 5 suppliers (usually by spend) to provide an in-depth analysis of the contractual, financial and performance of the suppliers.

Our experience is that the majority of budget goes on a relatively small number of suppliers. In a recent supplier portfolio analysis, 80% of the total spend was across six suppliers with the rest spent on a further 120 suppliers. This analysis provided the information to take action and consolidate and reduce the number of suppliers, resulting in an increase in negotiating power, improved value from outsourcing agreements and a reduction in overheads.


Following the analysis and where appropriate, we benchmark the top suppliers against the market. This benchmarking is either through market research, pricing enquiries or where necessary by issuing an RFP for the service concerned.

Recommendations to meet your objectives

With the completed analysis, the benchmarking and our recommendations on changes, you are ready to gain more value from your supply chain. So whether you are wanting to get a better grip on your portfolio, refresh your sourcing strategy, prepare for pricing negotiations or increase the scale of your outsourcing, having Retonomy undertake a supplier portfolio assessment can reap benefits.

Checklist for moving premises, Part 2

Moving an office

Moving an office can be as daunting as moving a warehouse and sometim es more so:  There are more people to look after, more needs to satisfy and “stuff” of all shapes and sizes to move.  Here are our top tips to set you on the right track:

Read more

How SIAM supports Supplier Diversity…the follow up

How do I recognise whether I have a great SIAM in place?

Last month we published an article on the role of SIAM in supporting a diverse supplier portfolio. We received some great feedback and one of the most asked questions was “OK, you’ve described at a high level what a SIAM programme looks like when implemented, but how do we know when we’ve got it right?”

In our article, we highlighted four key areas that our clients see benefits in: a strong Governance framework; a holistic view of the supplier portfolio; collaborative ways of working and flexibility in selection.

Rather than just tell you what it looks like when it’s going great, we’ll share our experience of what you’d see if it’s going wrong.  Here are some of the tell-tale signs:

Follow up table

The most common reason we see for a SIAM Programme not being effective is that its value hasn’t been recognised and has taken a back seat for other strategic priorities.

BUT all is not lost and with the correct focus, support and expertise, SIAM can become your effective solution to ensuring dynamic delivery from a diverse supplier base.

Get in touch here to discuss how to get the most from your supplier relationships.

How SIAM supports Supplier Diversity.


And how SIAM supports this fast-paced change


In the past, companies have looked to form strategic partnerships with suppliers by signing exclusive, long-term contracts. Conventional wisdom has been that it is better to have a small number of preferred suppliers – this requires less client-led governance, provides more deal power by giving the supplier more business, and allows for a long-term relationship to flourish.

However, many clients tell us they are moving towards greater supplier diversity and are seeking out smaller suppliers to be involved.   So why the change?

Is getting your supplier to be flexible like moving one of these?

Is getting your supplier to be flexible like moving one of these?


Our clients are beginning to see that their current strategy reduces flexibility in delivery. It is not easy to move from strategic partners due to contract or delivery lock-ins. They lack control, stuck with suppliers’ ways of working and delivery method. In general they face a high level of bureaucracy, and with large suppliers, change can be like moving an oil tanker! Companies want to be able to respond quickly to market changes and are looking for new ways to achieve this.



Digital disruption is creating new business models and allowing new and smaller players – let’s call them niche suppliers – into the market place. They are able to develop, evolve and promote new products and services because they focus on being expert in their field and deploy highly-skilled and targeted teams to crack tough problems quickly.  Operational managers are recognising the opportunity this brings and are looking to use it to their advantage.


Uber logo

Uber, the start-up taxi firm – now valued at forty billion US dollars only 6 years in – is a great example of this.  Based on a simple model that enables customers to book taxis using a mobile app, Uber has caused disruption to traditional taxi companies across the world. In London, despite an offer by Uber for Black Cabs to join them, the arrival caused strikes and complaints about unfair competition.  However, for the customer it offers an easier, more flexible and (mostly) cheaper way of travelling than the established companies, which is quickly turning the business into a global phenomenon.

Niche suppliers are more flexible and creative while focussing on their area of expertise. They are using cutting-edge innovation and speed of delivery to differentiate themselves from larger and more established firms. In turn, clients are looking for suppliers who are easier to deal with, who introduce competition and disrupt the status quo.

The risk of a broader supplier portfolio is the loss of cohesive delivery, especially when multiple suppliers must work together as a team. To mitigate this risk, an effective control process needs to be put in place, and this is where Service Integration and Management (SIAM) comes in.

The key role of SIAM is to be the “glue” which connects the suppliers and the end client, acting as a layer of governance and support to the operational management.

So, what does SIAM look like when implemented?  Clients benefit from a strong governance framework, with senior management of both parties meeting at a strategic level while delivery is managed by the service and project managers. Reporting is concise, informs decision-making, and is standardised across all suppliers.  An holistic view of the supplier portfolio shows how each supplier is delivering and how they fit in with the client organisation and business objectives.  Collaborative ways of working put multi-organisational teams together to deliver projects and services. And importantly, flexibility in selection enables them to choose the best supplier for the job.

By implementing SIAM, our clients are ensuring that they have the same level of control and performance management across all the suppliers, standardised methods are being used, and there is consistency in the way the suppliers are delivering.  This allows them to make decisions about supplier selection based on expertise and fit with objectives, knowing that their risk in using smaller suppliers is greatly mitigated.

Often, the SIAM role is handed to operations and business employees as an addition to their day jobs, but this important middle layer deserves more attention and specialised skills. There is an increasing trend of placing specific capabilities, independent from business units, project teams and procurement departments, to ensure the SIAM role is effectively delivered. In practice, this often means the SIAM function reports directly to the CIO’s office.

By setting up a SIAM, our clients have gained the advantages of:

  • Consistent and standardised delivery across the supplier portfolio,
  • An advocate that is the voice of the suppliers in their organisation,
  • An ability to evaluate a suppliers value rather than just cost,
  • Having a global view of supplier interaction in their organisation,
  • Impartial performance management across all suppliers.
  • More companies will be looking to supplier diversity to enable flexible delivery but without the effective management structures and standardised ways of
  • working SIAM provides cohesive delivery remains at risk.

If taking advantage of niche suppliers is in your roadmap, talk to Retonomy and see how we can help make this a reality.