Cultural empathy crucial in outsourcing contracts

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Major outsourcing news this week is that a British Islamic insurance company is outsourcing its IT to Capita in an £87m deal. British Islamic Insurance Holdings (BIIH) provides insurance compatible with the Muslim faith.

Capita will provide front and back office services and an IT platform from which to launch and sell BIIH “Takaful” insurance products.It is generally accepted by Muslim Jurists that the operation of conventional insurance does not conform to the rules and requirements of Shariah. This creates a dilemma for British Muslims but BIIH has provided a solution based on Takaful principles and its rapid success suggests that they have cornered this niche area of the market.

When outsourcing a business process, especially one that that touches the client’s customers and has to be operated within a religious framework it takes on a new dimension and great care needs to be taken over each step.

Cultural empathy is vital when choosing a supplier and Capita must fully understand all of the requirements of BIIH. Not only this, but any kind of unusual (within outsourcing) practice required of Capita must be framed within the contract. If Capita is required to meet any specific Shariah-related standards then they need to know about it (and agree to it) right from the start. Otherwise the relationship could quickly break down over specifics that were not discussed at the outset.

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