One of the largest managed care providers in the U.S. needed help developing a new actionable strategy and approach for their IT services. Business expansion through organic growth and acquisitions constantly challenged the IT services delivery model. As a result, the company needed to integrate, scale and adapt to evolving business requirements and regulatory constraints. As with most companies engaged in the outsourcing of IT infrastructure services, the portfolio of suppliers was split between end user services, data center services and internally sourced support services.
Existing sourcing contracts, with restrictive terms and a scope that lacked innovation and flexibility, were renewed several times over a 10-year period. Servicing the company’s increasing customer demand took precedence, while service strategy, realignment of the organization, and managing suppliers to meet growing demands all became significant challenges.
The organization lost control and became strapped to an antiquated set of contracts while service quality and flexibility eroded. With a critical need to transform their service model and approach, the client turned to WGroup to design a transformational sourcing strategy and roadmap to address their next generation service model objectives.
To define a baseline business case WGroup performed a 360-degree analysis of the client’s delivery models, suppliers, service and financial performance, technical capabilities and service portfolio structure. Leveraging this analysis, business objectives were defined and a sourcing strategy was developed to address the following needs:
IT service value starts with an organization’s ability to translate business strategy into an innovative services strategy. Finding the balance between the client’s technical capabilities and innovation in the market, while leveraging suppliers, is central to building a sourcing strategy that evolves with the business. Executing the right sourcing strategy requires knowledge of the industry and innovation trends.
A service contract is driven by more than just rates. For our client, it is how services are structured and financially modeled against the anticipated demand. The quality of service delivery and the ability to control
IT costs are based on meaningful service level agreements (SLAs). SLAs must provide the flexibility to vary volume based on consumption, appropriately sized organizations, supplier value and effective governance.
Developing a partnership with WGroup enabled the client to structure a multi-supplier services delivery model that dramatically increased IT service value to the business. The result was a 50%+ reduction in contractual expenses over the life of the contract.
The client was able to leverage their current service provider, minimizing disruption in services and reducing any risk to the business. The organization is positioned to meet all of the ten stated objectives, while significantly reducing costs. Strategic control functions were also shifted back to the organization, enabling the client to design and deliver new services with the flexibility to source services from a new partner model. Cost and quality levers were built into the innovative SLA and pricing structure. This successful partnership with WGroup liberated the organization from its outdated supplier dependence and positioned the company to extract supplier value to the fullest extent.
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