An $8B leader in personal and commercial insurance services required assistance in re-sourcing their existing Application Maintenance & Support (AMS).

CHALLENGES

• Incumbent provider consistently missing agreed upon service delivery agreements

• Lack of focus by incumbent provider and unwillingness/inability to provide quality resources for the engagement

• Benchmarks showed above-market pricing for existing engagement resource parameters

• Incumbent provider unable to handle new technology platform currently under development

SCOPE

• Legacy AMS activities for ~60 policy, billing, and claims applications

• Modern AMS activities for Guidewire policy, billing & claims application & supporting applications

APPROACH

• ITSE assessed client’s goals and objectives for the next iteration of their outsourcing through workshops to develop and document Key Business Decisions (KBDs) with the IT executive team

• ITSE worked with stakeholders to rapidly gather all information related to the existing AMS engagement along with the Modern AMS requirements

• ITSE conducted a market scan of solutions to determine which suppliers could potentially support the client’s needs under a tight timeline

• ITSE worked with the client to identify the scope and functional requirements needed

• ITSE created all RFP documents, issued RFPs to three leading suppliers in the space, and facilitated the beginning-to-end sourcing, evaluation, due diligence and selection process

• ITSE created supplier evaluations to score suppliers in various categories in order to identify the best supplier for client’s needs

• ITSE led negotiations and assisted Client Legal department in the development and finalization of all contractual documents.

KEY RESULTS

• 32% total 3-year engagement savings over incumbent provider

• Funded AMS engagement for Modern Applications with savings from Legacy AMS

• 3-year fixed price agreement with built in YoY cost reductions; optional years 4 & 5 fixed price pre-negotiated

• Negotiated rate card for additional services and locked for three years (no increases)

• Extremely high client satisfaction

A leading $7B global provider of food safety and security, facility hygiene, and product protection wanted to consolidate its existing scope of providers to a manageable portfolio for Application Development Management (ADM), specifically focused on Development, Deployment & Integration (DDI) space.

CHALLENGES

• Reduce costs by at least 15%

• Improve working capital and supplier performance

• Reset pricing model to current market conditions

• Consolidate IT consulting services suppliers

SCOPE

• Categories in scope: IT ADM services specifically related to DDI workloads

• Region: Global

APPROACH

• ITSE conducted an assessment of client’s portfolio of existing suppliers

• Identified opportunities to reduce costs by introducing new competition and by consolidating to a small panel of qualified, global providers

• ITSE conducted a competitive RFP process that included all incumbent suppliers and also included several new competitors

• ITSE facilitated the RFP evaluation process with client’s Core Evaluation Team to down-select the list of potential suppliers based on their written RFP responses

• Conducted Workshops with remaining suppliers and further down-selected based on outcomes of these Workshops and requested best-and-final-offers (BAFOs) incorporating provided feedback

• ITSE facilitated the negotiation process of BAFOs and Core Team aligned on split award for ADM services among the top 3 suppliers

KEY RESULTS

• 18% annual savings

• Established a panel of qualified suppliers including several new suppliers for ADM services

• Established a formal process for evaluating & awarding new projects to the selected suppliers

• Rate cards guaranteed for two years without increases

• Extremely high client satisfaction

A $2B leader in Education & Learning services required assistance in re-negotiating and restructuring their existing Application Maintenance & Support (AMS) and Application Development Management (ADM) engagement with their incumbent provider.

CHALLENGES

• Incumbent provider reports all “green” on Service Level Agreements (SLAs) but reporting is skewed as a one-size-fits-all model

• Lack of focus by incumbent provider on the “right work” - oversized AMS Team with undersized ADM team

• Benchmarks from ITSE showed above-market pricing for existing engagement resource parameters

• Incumbent provider is too entangled in current workload delivery to be removed – desire is to re-negotiate if possible

• Current engagement model does not have the right mix of Onsite:Offshore, especially on ADM side to fully support Agile and distributed development processes

SCOPE

• Legacy AMS activities for all applications

• ADM activities for new application development activities

• North America

APPROACH

• ITSE assessed client’s goals and objectives for the next iteration of their outsourcing through workshops to develop and document Key Business Decisions (KBDs) with the IT executive team

• ITSE worked with stakeholders to rapidly gather all information related to the existing AMS engagement along with the Modern AMS requirements

• ITSE led the re-classification of the AMS Application Portfolio into Critical / Non-critical and Gold / Silver / Bronze (based on Business Value) in order to drive to appropriate focus from the Supplier based on these new classifications

• ITSE led negotiations to “right-size” and “right-location” the resource mix of core AMS resources to drive a leaner AMS Team, and thereby improving efficiencies and reducing legacy maintenance costs

• Client also decided to remove Enhancements altogether from the AMS engagement which reduced the AMS Scope to only Break/Fix Support and Maintenance Only - Enhancements become part of the ADM engagement

• Client optimized the Core ADM Team to “right-size” and “right-location” mix of core ADM resources. Large Enhancements and Project Work to be treated as ADM activities billed directly to the Business. All other IT resource needs committed on project-by-project basis – May utilize incumbent Supplier or other “preferred” suppliers at Client’s discretion

• ITSE developed a holistic & centralized Governance model across towers at a program level (AMS & ADM). Client created a new internal position for Supplier Engagement Lead to manage the entire AMS/ADM engagement

• ITSE led negotiations and assisted Client Legal department in the development and finalization of all contractual documents.

KEY RESULTS

• 23% total 3-year engagement savings by renegotiating with incumbent provider

• Right-sized and Right-located all AMS & ADM Supplier resources to improve overall operational efficiencies

• Refocusing of AMS effort towards Gold Applications to ensure core systems remain attended to

• 3-year fixed price agreement with built in YoY cost reductions; optional years 4 & 5 fixed price pre-negotiated

• Negotiated rate card for additional services and locked for three years (no increases)

• Extremely high client satisfaction

A $19B multinational manufacturer and marketer of home appliances required assistance in the initial outsourcing of their Application Maintenance Services (AMS) and Application Development Management (ADM) domain areas.

CHALLENGES

• Issues include plethora of handoffs among over 50 IT Service Providers in the current model

• Sourcing objectives include; Cost savings, Access to enhanced skillsets, Productivity improvements for both AMS and ADM, and increased throughput

• Client had not previously outsourced IT so challenges also included first time contract development, HR related issues with transfer of personnel, and overall Change Management for the organization

• Desire to increase the offshore numbers that include a significant number of sustained resources to maximize the resource knowledge base

SCOPE

• Legacy AMS activities for ~600 Applications and ~500 Interface points

• North America focus with some Regional impacts

APPROACH

• ITSE assessed client’s goals and objectives for the first iteration of their outsourcing future-state organization through workshops to develop and document Key Business Decisions (KBDs) with the IT executive team

• ITSE worked with stakeholders to rapidly gather all information related to the existing AMS engagement along with the new development requirements

• ITSE conducted a market scan of solutions to determine which suppliers could potentially support the client’s needs under a tight timeline

• ITSE worked with the client to identify the scope and functional requirements needed to build out a very detailed RFP Package that included both AMS and ADM requirements to be provided by a single Service Provider

• ITSE created all RFP documents, issued RFPs to five leading suppliers in the space, and facilitated the beginning-to-end sourcing, evaluation, due diligence and selection process

• ITSE created supplier evaluations to score suppliers in various categories in order to identify the best supplier for client’s needs

• ITSE led negotiations and assisted Client Legal department in the development and finalization of all contractual documents.

KEY RESULTS

• 33% total 3-year engagement savings over in-house IT department funded resources (transitioned 40 resources to Service Provider)

• Developed a new Governance group within Client IT organization to monitor and manage the Service Provider ongoing

• 3-year fixed price agreement with built in YoY cost reductions; optional years 4 & 5 fixed price pre-negotiated

• Negotiated rate card for additional services and locked for three years (no increases)

• Extremely high client satisfaction