IT outsourcing transformation

IT outsourcing transformation

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  Opportunity The client, aglobal manufacturer with business units in aerospace, automation and control systems, materials engineering, and transportation systems, sought market alternatives to its long but unsatisfactory relationship with the service provider operating its enterprise IT infrastructure.The service relationship consumed a large portion of total IT infrastructure spending, including mainframe computing, all servers and storage, identity and access management (IAM), and all database and web hosting support. Further— a prior project resulted in RFP responses that failed to address the client’s reasons for rebidding the services or to fulfill its desires to better leverage its computing infrastructure for competitive advantage. With the bidding process stalled and the contract deadline approaching, the client came to WGroup for help. A team of two WGroup principals, with collectively more than sixty years of business and IT experience, approached the discovery process with a thorough understanding of what questions needed to be answered, to whom to ask, and how to structure the interview process to inform and expedite the sourcing initiative. In just six weeks, the team interviewed sixty people, including corporate executives, business group presidents, IT executives and staff at various levels to help understand the client’s current state, its technical and business challenges, and what it was looking to accomplish in the future. The team used WGroup’s proprietary, tested methodologies to build financial and technological models to help design the RFP and to evaluate the vendors’ responses.The WGroup team named the bid document the RFS—request for solution— to distinguish it from the earlier, unsuccessful RFP initiative. WGroup’s solid understanding of suppliers helped identify candidates with the right capabilities that would align well with the client’s culture and deliver all its business objectives. Inventory lists, scope, delegation of responsibilities, and detailed cost analyses developed for the RFS and a thorough understanding of relevant technical and legal issues went into designing and negotiating the service contracts. WGroup also worked with the client to plan and manage the transition to new service relationships with the incumbent and multiple new service providers. Drive Your Business IT Outsourcing Transformation WGroup Helps Fortune 100 Corporation Transform Its Enterprise Computing Infrastructure into an Engine for Innovation Manufacturing | IT Infrastructure Outsourcing 1 With a contract deadline looming, the client brought in WGroup to restart a stalled RFP effort and guide its IT sourcing strategy beyond incremental improvements toward service providers capable of delivering transformative advances in automation, efficiency, and effectiveness.
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  WGroup team’s RFS initiativedelivered what the previous RFP procurement process could not—real business value. Approach WGroup brings a business perspective, rigorous analysis methodologies, and proprietary modeling tools to technology sourcing and information management initiatives. In this engagement, the WGroup team’s RFS initiative delivered what the previous RFP procurement process could not—real business value. A sourcing strategy with its sole focus on the procurement transaction— squeezing vendors to get the lowest unit cost—often results in poor performance and unsatisfactory service relationships. WGroup’s experience and approach—and its skill and forte in working with service providers on the client’s behalf—ensure a successful meshing of cultures and capabilities to create long-term, value-generating relationships. Prior to WGroup’s involvement, several rounds of contract renegotiations over five years had failed to deliver the transformative relationships the client wanted. Optimum business value comes only with synergy and alignment of corporate cultures and business strategies between the client and its service providers. WGroup’s structured approach adapts to each client’s business philosophy to facilitate this rapport so the client feels comfortable it is picking the right solutions at the right price from service providers that share the client’s commitment to mutually beneficial relationships. WGroup adapted its methods to help the client narrow the candidate search to two vendors in each service category to provide a more intensive and interactive bidding process consistent with the client’s contracting approach. WGroup 2 The service providers appreciated that WGroup’s participation in the sourcing initiative kept the bidding process organized and timely.The providers knew from experience that the RFS would accurately and thoroughly describe the client’s current situation and desired future state, and that the evaluation of bids would be objective and fair.This partnership approach—as opposed to an adversarial procurement process —has resulted in more valuable service relationships. Insights and Advice The key differentiator between the inadequate RFP effort and the RFS delivered by the WGroup team was transformation. Over the duration of the deal, the client wanted to transform its computing infrastructure to support major enhancements to automation, efficiencies, and effectiveness, and had no confidence such transformation could be achieved with its current service provider. Most importantly, the client realized its desired future state could not be realized by taking a typical procurement “lowest unit cost” approach to vendor selection.The client wanted new capabilities, like establishing virtual cloud environments, to improve efficiency of processes and overall cost effectiveness. Opportunities also existed to automate processes such as password resets. WGroup quantified substantial cost savings from these and other process improvements.
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  During discovery interviews,the WGroup team listened carefully to what client employees at many levels said IT was doing well and what it was doing poorly.They designed the RFS to address weaknesses in IT infrastructure and deliver enhancements that would lead to competitive advantage. There were four breakthrough differences in WGroup’s approach The WGroup team helped the client save money by broadening service options from the previous “one size fits all” cost model through the following activities: • Differentiating among “gold,” “silver,”and “bronze”service levels for each server. Some business functions needed 24/7 support and high availability; others, such as testing or developing applications, did not. • Bidding the work by Tower (Server, Storage, Database, Web and Identity Management). Some service groups specialize in specific technologies; breaking the work into these towers allowed the specialized firms to compete. If the work were bid as a whole, those specialized firms would have been uncompetitive. • Breaking the work into multiple delivery schemes. In the previous environment all work was considered to be ‘export controlled’, forcing service providers to deliver all support on shore or on site. WGroup’s analysis established that up to 60% of the infrastructure might not be constrained by those controls. By establishing a ‘subscription-based’ delivery model, customers of the infrastructure group would certify that their workload was not constrained by these restrictions and therefore could attain an additional 25 – 30% cost reduction over all on-shore delivery. • Self-service provisioning for private cloud. One of the key complaints about service from the IT group was extremely slow provisioning for ‘standard’ configurations.To mitigate these issues, the development of an internal private cloud with self-servicing (orchestration layer) was included in the bid. Having these differentiated and variously priced options saved the client money and alleviated service concerns by appropriately targeting workloads to the delivery model that best fit the needs. IT Outsourcing Transformation 3 Having these differentiated and variously priced options saved the client money and alleviated service concerns by appropriately targeting workloads to the delivery model that best fit the needs.
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  Contact Us WGroup 301 LindenwoodDrive, Suite 301 Malvern, PA 19355 610-854-2700 Copyright © 2013 WGroup. All Rights Reserved.4 011_ECIARVCS_073113 About WGroup Founded in 1995, WGroup is a boutique management consulting firm that provides Strategy, Management and Execution Services to optimize business performance, minimize cost and create value. Our consultants have years of experience, both as industry executives and trusted advisors, to help clients think through complicated and pressing challenges to drive their business forward. For more information on WGroup, visit http://thinkwgroup.com Value Delivered Paradoxically, the client achieved greater cost savings by not focusing solely on low-cost service options. An earlier, unfinished RFP project had projected cost savings of 30% over the client’s previous total IT infrastructure spend.The WGroup team’s RFS analysis and guidance resulted in service contracts that saved the client nearly 50% over its pre-RFS spending for infrastructure services. A portion of those savings goes back to the client’s bottom line, but a sizeable fraction funds “transformation projects”— projects that create technology and process improvements to help develop and deliver new business opportunities. To realize the most value from these transformation projects, the WGroup team helped the client develop innovation councils.Through this collaborative relationship, business and IT can combine their strengths to tap into creative ideas and better manage innovation. WGroup also helped the client improve their multi-supplier governance model to leverage current and future relationships with service providers for optimum business value. The client now has a mechanism in place to get new products to market faster than the competition or develop applications that increase process efficiencies and revenue. The WGroup team’s RFS analysis and guidance resulted in service contracts that saved the client nearly 50% over its pre-RFS spending for infrastructure services.