The Challenge
‘A group-wide cost-cutting initiative has been launched to address issues arising from outdated and inefficient IT systems. Currently, non-harmonized and non-streamlined multi-supplier sourcing for IT has led to a silo-focused organization struggling to keep intellectual property in-house. Meeting the annual IT budget has become a challenge, with IT functioning reactively rather than as a digital enabler. Consequently, IT is not seen as a trusted business partner, prompting the need for a comprehensive overhaul to modernize processes and improve collaboration.
Based on a managed services approach for IT commodity business, the organization was transformed to an agile and innovative company
The Approach
‘The current IT organization, including full-time employees and costs, required a thorough review. To address this, a sourcing strategy was developed and implemented. This involves tendering processes, such as RFI and RFP, leading to contracting. Additionally, contract due diligence and renegotiation were necessary steps to optimize agreements. Transition and transformation efforts should focus on transforming the IT organization and target operating model. Establishing a digital program office for all projects and moving to outcome-based contracts further enhanced efficiency and effectiveness.
A new digital journey was built for the client, where the organization streamlined processes, drove innovation, and enhanced overall performance.
The Result
‘Over the past five years, the company has achieved $100 million in savings while $20 million in innovation legroom were negotiated. The success could only be realized by setting up a Center of Excellence (CoE), including new roles, by modernizing IT operations and transitioning to outcome-based contracts and services.
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