Negotiating Better Solutions with IT Partners

Drive Your Business

Case study

See how WGroup helped a major insurer fix service delivery performance issues while working with an

incumbent partner – developing an innovative solution to improve service and reduce costs.

The client, a leading insurer, had a long relationship with an IT solution provider. The provider offered services for servers, storage, network, DR and end-user services including service desk for approximately 9,000 employees.

1OPPORTUNITY

The client, however, was dissatisfied with

the service levels being offered, and wanted

to explore other options that could improve

performance and reduce costs.

2

Although the provider had been consistently meeting the terms of the dated, legacy contract, the client felt that the provider’s performance was severely lacking. They were only performing to the bare minimum of contract requirements, rather than trying to meet end-user needs.

Governance had become stale and ineffective on both parties behalf. Perceptions were that the provider was performing very poorly, and efficiency within the company was suffering as a result.

3

The client had fallen into the “watermelon effect” trap, wherein providers meet service-line agreement (SLA) terms but don’t actually deliver on end-user performance. This occurs when the terms defined in the SLAs are based on arbitrary metrics instead of business goals.

In order to reduce costs and improve end-user experience, the client contracted WGroup to help them put together an RFP and work with providers to develop a more effective solution.

The “watermelon effect” trap: SLAs appear green on the outside, but look red from the end user’s perspective.

4

2APPROACH

By gathering a consensus view from both the client and provider, it was possible to form a more complete set of goals that addressed a wide range of needs. This provided the foundation for the future work of drafting an RFP and working with a provider to develop a better solution.

WGroup approached the problem by engaging in a detailed discovery process to identify the root problem – and to begin to define a target future state solution.

WGroup reoriented the goals of the solution from industry standard metrics to measurements of how it would actually affect end users and business needs. Shifting the focus from IT to the business as a whole allowed the client to incorporate more helpful expectations into their RFPs, leading to more effective solutions.

WGroup also helped the client select providers that had the greatest potential to meet their needs. Reviewing a wide range possible options, the consultants at WGroup used their extensive contacts and industry knowledge to put together a viable short list of providers to which to submit RFPs.

A multi-pronged approach reduced risk for the client.

As the culmination of this effort, WGroup helped draft an RFP for service desk and desktop services and a sole source term sheet for all other IT infrastructure operations.

3INSIGHT + ADVICE

WGroup recognized that the client’s current solution was not meeting end users’ expectations driving business goals. To help them rectify the situation and develop a solution that more effectively met the needs of the organization, WGroup leveraged our breadth of experience in solving complex IT delivery and governance models and best practices.

Through our structured RFP process targeted at soliciting certain key delivery models while allowing for provider creativity and customized solution enhancements, the client received the most innovative solutions to the problem.

7

The sole source scope was addressed by engaging in open and candid dialog with both the client and provider to clarify perceptions. A revised agreement was made using market-based terms and conditions and by preparing market pricing.

Despite the failure of the client’s current provider to meet the needs of the end user, the client valued their relationship and decided to allow the provider to submit their own proposal. The client now had a clearer understanding of their goals from direct market analysis, which gave them the ability to draft an outline for a more effective solution. Ultimately, the client took the collective solution to the current provider. The provider then built a solution to the new specifications.

8

This approach let the client continue their long relationship with the current provider, while allowing

them to benefit from outside ideas and build a solution that better met their needs.

4RESULTSThe client’s current provider was able to develop a much more effective solution that met business needs, reduced costs, and improved service levels. The solution included end-to-end service, with a service desk, desk-side assistance, ID administration, and software distribution.

The new solution helped to improve user satisfaction and increase productivity, while also increased its scope to include Canada, significantly expanding the number of employees served.

10

In order to reduce costs, the new solution made much greater use of automation. In the legacy solution, even simple tasks such as password resets required human intervention, greatly adding to the overall costs and causing frustration for end users.

With the implementation of new data analytics functionality, the new solution more easily allocates resources and solves problems.

Self-service and a wide range of automation

functionality improves effectiveness and reduces cost.

11

The new solution is much more user-oriented. The addition of a Tech Café that allows users to get in-person help and drop off devices for service is one of the details that improves employee experience. The decision was made to shift service from email to chat, further improving customer satisfaction and allowing problems to be solved more quickly.

Even with the increased scope and performance of the new solution, it is much more cost-effective than the legacy solution. The contract was also reoriented, so instead of payment for effort, the client pays the provider based on the end results. This provided much greater incentive for the provider to continue to perform as expected.

The new solution will cost the client an estimated $100 million over a five-year term.

This respresents a 39% savings over the legacy solution.

With the help of WGroup, the client was able to continue to work with their longtime partner, while

meeting their goals of reducing costs, improving service, and driving business goals.

Founded in 1995, WGroup is a boutique management consulting firm that provides Strategy, Management and Execution Services to optimize business performance, minimize cost and create value. Our consultants have years of

experience both as industry executives and trusted advisors to help clients think through complicated and pressing challenges to drive their business forward.

Visit us at www.thinkwgroup.com or give us a call at 610-854-2700 to learn how we can help you.

150 N Radnor Chester Road • Radnor, PA 19087

610-854-2700 • ThinkWGroup.com