The Situation

The Organisation had got into a long term IT Outsourcing Contract with a Tier I service Provider to manage all of its IT Services.
The contract

* Included a year-on-year increase in payment for inflation
* Did not include any potential benefits due to efficiencies
* Technology upgrades not included
* Included Infrastructure, Applications & Network Services
* New initiatives at additional charge
* No innovations

After a three year period, the company realised that it had gotten into a wrong contract and wanted to find ways of restructuring the same

The Task

* Deliver value to business by improving service delivery provided by IT
* Optimise IT Costs
* Understand the contract better with Terms & Conditions
* Outline ways of restructuring / Re-organising the contract

The Action / Approach

To identify cost, quality and innovation improvements through development and delivery of an aligned sourcing strategy, we;

* Documented past performance of the service provider and highlighted gaps
* Determined costs incurred for legacy / solutions that were phased out, documented them and discussed with the Service Provider
* Kick Off exploratory discussions with alternative providers
* Benchmarked costs across different suppliers for similar services
* Outlined and discussed the issues and findings with the service provider on the basis the data uncovered

The Result

Identification of cost, quality and innovation improvements through development and delivery of an aligned sourcing strategy.

Specifically, value was delivered by;

* Enabling alignment between business requirements and budget use by Inflation Proofing and Efficiency Sharing
* Enabling IT to Drive Innovation for Competitive Advantage
* Improving reputation, relationships, confidence and value delivered across the business by introducing cost reductions and providing for innovations
* Optimising the Procurement Target Operating Model

Focus In On: Responsible for Developing or Implementing a Sourcing Strategy

New Areas of Value:

Well aligned business requirements and budget use

Driving innovation for competitive advantage