Cost Optimisation

IT Spend Review

Challenge

Our client, a major food retailer and wholesaler, needed to quickly reduce its spend with external providers.

The COVID-19 pandemic had a significant impact on revenues for their Wholesale division resulting in a requirement for both in-year and longer-term cost savings.

Four large IT outsourcing contracts were in their first few months with little formal opportunity to renegotiate pricing.

case-study-triangle-img

Solution

Undertook an initial review of spend with external partners to identify savings

Performed an initial triage on savings opportunities based on the amount of spend and the level of commoditisation in the services

Met with client stakeholders to understand the context behind the commercial arrangements

Reviewed pricing for the in scope contracts; competitiveness of unit rates and the rate card versus similar deals; mix of fixed and variable charges

Calculated potential in-year savings

Analysed the elapsed time before the financial savings would be realised and the risk, both IT and business, associated with each initiative

Outcome

A series of recommendations for cost optimisation

  • Our analysis showed that savings of €1m+ per annum could be realised
  • The risk and investment required for the majority of these initiatives was low
  • Peru identified that 6 supplier contracts were up for renewal in the next 6 months; the perfect opportunity to renegotiate pricing but also put in place mechanisms to support sustainable financial and service management
  • Peru analysed longer-term, strategic programmes that should be initiated to reduce spend, e.g. applications rationalisation
  • Peru provided a series of recommendations on commercial and financial management to ensure that cost optimisation was not simply a one-off exercise
Triangle Icon

Value

In-year savings of €1m+

Detailed input to the business case for moving services to cloud

Prioritised roadmap of the initiatives to be taken to reduce spend in a controlled manner

The ability to answer stakeholders in the wider organisation on the competitiveness of IT spend

Confidence that a number of arrangements were priced competitively and, as such, not a focus for immediate cost reduction

Contact Us

We use cookies to ensure that we give you the best possible experience on our website. Click here for more information.