ISG’s data-led, multidisciplinary team identified opportunities to optimize the cost of IT service delivery for a major US materials producer.
Opportunity
The company is manufacturer of materials products in the United States with a revenue of over $10 billion. Many years of opportunistic cost take out programs left the company with a very lean, largely internal IT services delivery model.
The company was seeking to deliver further, significant cost savings to the bottom line through additional cost take out opportunities but was concerned that such efforts might limit its ability to innovate, might create deterioration in service and/or might bring unacceptable levels of risk to the business. The company asked ISG to help it to assess all categories of its IT spend to determine what opportunities for further optimization might remain It also wanted to understand how it might meet its financial goals without compromising its ability to manage the business.
The company was seeking to deliver further, significant cost savings to the bottom line through additional cost take out opportunities but was concerned that such efforts might limit its ability to innovate, might create deterioration in service and/or might bring unacceptable levels of risk to the business. The company asked ISG to help it to assess all categories of its IT spend to determine what opportunities for further optimization might remain It also wanted to understand how it might meet its financial goals without compromising its ability to manage the business.
Imagining IT Differently
ISG assembled a multidisciplinary team of professionals from a variety of service lines to develop an understanding what opportunities might emerge from taking a more holistic look at how IT services were being delivered. An initial assessment leveraging ISG’s Inform™ database was conducted to identify areas of potential opportunity and areas where underinvestment might be creating risk.
ISG professionals with expertise in software license management and servicing, wireless and wireline network services, IT services and the materials vertical were then brought together and aligned with the company’s counterpart roles. Through a series of interviews and workshops, each potential area of opportunity was analyzed, and recommendations were brought forward to drive holistic IT savings without compromising quality.
ISG professionals with expertise in software license management and servicing, wireless and wireline network services, IT services and the materials vertical were then brought together and aligned with the company’s counterpart roles. Through a series of interviews and workshops, each potential area of opportunity was analyzed, and recommendations were brought forward to drive holistic IT savings without compromising quality.
Future Made Possible
- The company benefited from an ISG Inform™ study, which identified areas for further cost optimization investigation.
- Additional analysis by the multidisciplinary team identified tens of millions of dollars in cost optimization opportunities associated with changes in the delivery model for IT Services.
- The company received creative sourcing techniques with top-level service providers which allowed it to minimize up-front investment.
- The ISG team also identified $1 to $2 million in current-year cost optimization opportunities associated with the structure of current contracts and purchasing arrangements.
