Global consumer products company 

Righting the ship: Restructuring a troubled IT outsourcing arrangement leads to 80% less downtime

Righting the ship: Restructuring a troubled IT outsourcing arrangement leads to 80% less downtime

What We Did 

A leading consumer products company entered an IT outsourcing agreement with a large global technology provider and soon realized it wasn’t receiving the service or results it expected. That’s where we came in. 

Tapping into our deep IT strategy and strategic sourcing expertise, our team cast a wide net looking at the partnership, the environment, and other factors that affected performance. We then worked with the company and vendor to restructure the arrangement with a new delivery team and performance metrics. A year later, the results speak for themselves.  

80%

less downtime

10%

reduction in vendor management/overhead costs and asset management costs 

90%+

vendor key performance indicators achieved 

The Opportunity 

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.

Timeline

1
Month
Assessed the current environment
1
Month
Developed recommendations
4
Months
Executed the restructuring project
6
Months
Monitored and optimized the new arrangement

Returns You Can Measure 

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. 

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