ISG helped a global healthcare company going through a divestiture separate 700+ IT contracts across 300+ suppliers, meet TSA deadlines and set up governance with ISG GovernX.
Opportunity
A global healthcare company was undertaking a major divestiture, requiring rapid, clean separation of its IT contracting landscape to enable the remaining company ("RemainCo") to operate independently from the newly divested company ("NewCo"). The contracts were stored in many locations and formats, with tight transition service agreement (TSA) milestones and little room for error. Internal procurement capacity was constrained, and leaders needed a scalable model that could move hundreds of agreements in parallel while protecting continuity and commercial position.
The company selected ISG to assist for our independence, experience and ability to flex resources up or down week-to-week. ISG also brought our supplier and contract management platform, GovernX®, our depth of expertise in complex software agreements, and our onshore and offshore center of excellence (CoE). Competing models lacked the same specialization or were aligned with the NewCo, whereas ISG’s focus remained on the RemainCo’s outcomes.
Imagining IT Differently
ISG proposed a tiered operational structure: a Tier1 team dedicated to handling complex agreements and a GovernX-enabled team for all other in-scope contracts. GovernX served as ISG’s governance and contract platform, streamlining processing and laying the groundwork for potential post-divestiture supplier and contract management services.
To handle volume without sacrificing quality, ISG combined an onshore team of software, contract lifecycle management services (CLMS) and network experts with the offshore center of excellence. An extraction engine and AI-enabled tooling accelerated metadata capture, clause analysis and negotiation prep, while GovernX and a custom-built Power BI platform provided tracking, dashboards and status transparency.
The initiative adhered to a phased approach in alignment with TSA exit timelines: vendor review and prioritization; contract assessment and data collection; determination of contract disposition (assign, novate, terminate or renew); vendor engagement and tracking; resolution of high-impact or high-risk issues; and finalization with ongoing PMO and metrics.
Future Made Possible
In summary, ISG performed:
- A rapid triage and processing of over 700 IT contracts; predominantly software-based portfolio;
- Coordination among approximately 300 suppliers in parallel Tier1 and Tier2 provider workstreams;
- Strategic management of a complex telecom carrier environment;
- A successful two-year separation program aligned to TSA exit milestones; and
- Detailed contract status and stranded cost executive reporting.
The results:
- Throughout the process, ISG underscored best practices for separations, including the prompt identification of critical systems and dependencies, clear task ownership, automation to minimize manual effort and risk, and strategic reporting.
- These measures created structure amidst uncertainty, maintained synchronization of workstreams and safeguarded business continuity.
- Quantitatively, ISG successfully helped the RemainCo address 700 agreements across 300 suppliers over a two-year span with the required velocity, best practices and coordination.
- Qualitatively, the RemainCo achieved enhanced cost transparency, lowered stranded cost risks and improved positions for renewals all while ensuring service continuity during the transition.
Is a divestiture or acquisition on the horizon for your firm? To ensure a clean separation and reduce stranded cost risk, reach out to ISG today.
