case study: Industry utility sourcing optimisatioin

BACKGROUND

This case study outlines work completed for a major financial services organisation. The company provides a range of retail, business and institutional banking, funds management, superannuation, insurance, and broking services. The infrastructure service delivery team were under significant pressure from their Business Unit customers to significantly improve the quality and cost of service delivery. This pressure was compounded by issues with implementation of a number of infrastructure projects and forecast year-on-year cost growth of 10%+. While the IT team were managing point IT solutions well, constant demands to address operational issues prevented implementation of a more customer centric approach.

OUR ROLE

reveal group baselined the activities and costs required to deliver end-to-end infrastructure services for each IT platform. These activities were then re-assembled into groupings designed to optimise manageability, business value realisation and cost-to-deliver.

RESULT

reveal group developed an optimal sourcing plan. This included recommendations for how IT could address gaps in capabilities that should be sourced internally, and recommendations to optimise the supply of activities provided by either internal or external suppliers.

The plan targeted cost savings and improved supply chain effectiveness by:

Eliminating duplication
Reducing the number of suppliers
Providing end-to-end accountability for ‘logical bundles of activity’
Improving the group’s ability to match investment to need
Driving operational improvements across the group’s internal suppliers

Recommendations were forecast to deliver a significant improvement in time to market, the customer experience and stability and reliability. These would improve because of the elimination of supply chain complexity; suppliers would have end-to-end accountability for all of the activities, assets and services required for the delivery of a business service.

Recommendations were also forecast to deliver year-on-year savings of 10 – 15%. These were achieved by reducing the number of suppliers to a select few who have the scope of service they require to optimise their supply chain. To ensure that savings are sustainable, internal capability effectiveness recommendations were suggested for implementation. These provided the organisation with management, architectural and support processes for ongoing sustainability.

Following completion of the engagement, recommendations are being implemented. Performance improvements benefits are being exceeded and targeted cost savings are on track. It is expected that implementation of recommendations will be complete by Q2 2009.

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