Consolidating IT vendor landscape and increasing cloud capabilities saves $250 million

Our Impact

Large-scale IT vendor relationships can go awry if not for strategic selection, flawless contract negotiation, documented partnership expectations, and transparent KPIs. A global consumer products company need a strategic partner to help them optimize their IT vendor landscape and find ways to extract more value from those relationships. That’s where West Monroe came in.

We leveraged our deep IT strategy and strategic sourcing expertise to help the company: 

• Review the IT vendor partnership, environment, and other factors that affected performance, and work with the company and vendor to restructure the arrangement with a new delivery team and performance metrics. 

• Achieve sustainable year-over-year savings by consolidating its IT vendor landscape and using vendors more strategically—leveraging more services from fewer, more capable vendors.  

The Full Story

The Challenge

Our client entered an outsourcing agreement with a large global IT provider and wasn’t satisfied with the degree of partnership, the outsourcer’s client service team, or the level of innovation the vendor brought to the relationship. The outsourcer wasn’t fulfilling its contract obligations. The lack of partnership created instability in the IT environment and took time—and attention—away from strategic activities.  

The company wanted an informed perspective from a third party experienced in sourcing services across different IT services, establishing large and complex IT outsourcing relationships, negotiating contracts, and restructuring high-value deals. West Monroe was there to help.  

An Undeniably Different Approach

We quickly deployed a multidisciplinary team—with expertise in IT strategy and strategic sourcing, as well as deep industry expertise—to take a broad view of the company’s concerns.

Our team looked at various areas—outsourcer, client, process, contract, tools, and technology—to uncover the root causes of specific issues. We conducted interviews with the client and outsourcer, analyzed data (or noted the lack of it), and measured delivery performance while benchmarked it with other successful deals. We analyzed the contract and made recommendations based on our experience with IT previously successful outsourcing contracts. We looked beyond the partnership and contract for other factors in the environment that influenced behavior and/or distracted people from addressing issues.

But we weren’t just content to offer suggestions and leave. We were committed to actioning our recommendations to help drive real, measurable results. So we rolled up our sleeves and worked with the company to orchestrate a change in the vendor’s client delivery team and restructure the partnership with new expectations and performance metrics. We stuck with the company over the following months to monitor developments and to fine-tune the new working partnership.

Real Results

Our client saw quantifiable improvements within a year. Its downtime decreased by 80% while also seeing both reduced asset management costs and vendor management costs by 10%.  

The company’s outsourcing partner is now delivering on most of its critical service levels. After changing its delivery team, the vendor has achieved more than 90% of its key performance indicators. The relationship now feels like a partnership. The parties are engaged in productive performance-improvement discussions, and the vendor is providing the company with useful data and reports for decision-making. At the same time, the changes have freed more time for the company’s personnel to focus on strategic initiatives such as implementing new automation capabilities and modernizing processes. 

The Full Story 

The Challenge 

The consumer products company was experiencing fragmentation in their vendor footprint, which was increasing operating costs and creating confusion. They knew if they could simplify the vendor situation, it would result in better vendor utilization and better ROI on vendor spending.  

Non-standard workflows was another roadblock they faced. The lack of standardized, repeatable processes was hurting productivity and creating downtime. Further, limited cloud-native solutions and a lack of DevSecOps integration across IT hindered collaboration, data security, and application deployment speed. If the client could overcome these challenges, they’d decrease IT management costs and start developing holistic solutions from which the entire team could benefit.   

We helped them better understand the core problem by assessing the current state across several IT towers. We also analyzed their IT partners and vendors’ contracts to develop a robust sourcing and location strategy—helping standardize this part of the process.  

An Undeniably Different Approach 

Their previous approach rewarded short-term solutions and created a fragmented vendor landscape. We addressed the problem with a strategy-first mindset that gave us the right footing to develop an actionable strategy.  

Just as important to us was establishing a team that could provide a well-rounded perspective and precise recommendations based on industry knowledge. To set up a transformation office, we brought together expertise from IT strategy, business process outsourcing, organizational change management, and project portfolio management.  

Our multidisciplinary team then assessed the current state of their operations and helped them develop a strategy for consolidation. We reviewed their digital capabilities and helped them integrate cloud tools and agile methodologies into their processes. The engagement resulted in improvements in IT efficiency, adoption of DevSecOps, and impressive measurable savings.  

Our focus on strategy and people allowed us to deliver unique value in several ways:  

• We provided end-to-end support across the strategy, their executive team, and transition from one model to another.  
• We were upfront about the potential value this project could create, which allowed us to secure essential stakeholder buy-in. We did this by leveraging current baseline costs and research around qualitative future benefits like vendor management and overhead improvements to highlight potential savings before we began the work.  
• We cultivated relationships with senior vendor executives, which helped increase investment. 

Our partnership with the client has significantly improved IT operations. Now, they can leverage economies of scale thanks to vendor consolidation and a focus on strategic vendors that provide increased value. 

Real Results 

By working together, we made qualitative improvements across vendors, operations, and IT. Since consolidating the vendor landscape, the client has experienced reduced management overhead, downtime, and wasted resources. We also improved their digital capabilities by increasing cloud adoption and implementing agile methodologies, including DevSecOps. These improvements led to measurable changes to the client’s bottom line.  

The optimizations to vendor management resulted in $225 million in IT contract savings and another $25 million in IT management cost reduction for the company.