Data Center Outsourcing Opportunities Assessment

Project Background

The Client is a $3.7 billion manufacturer plants and offices in North America, Europe, Latin America, and Asia. The Corporate IT organization provides all infrastructure and administrative applications support from the headquarters location, with geographically decentralized facilities throughout the world. In addition, specialty IT organizations provide support to process control and manufacturing operations. Outsourcing was being considered as well as other options as a mechanism to improve IT outcomes and appreciation.

The Data Center operates an efficient 7×24 schedule supplying direct services to the global operations of the Company. While a small IBM mainframe function is still operative to support some legacy systems, the company is a “wall-to-wall” SAP organization with over 30 HP servers installed, both centrally and at distributed locations. Lotus Notes is installed worldwide and supported by an additional dozen servers. Numerous NT-based servers support LAN and local applications. In addition, a powerful WAN backbone is also supported. A TBI project manager and two senior consultants were assigned to the project to assess the potential opportunities, risks and long-term benefits of outsourcing.

Problem Summary

The Company desired to realize measurable service improvements and cost savings through outsourcing but especially focused on improving customer satisfaction. Thus the scope of review included both infra structure and applications (SAP and legacy) functions. This move would also contribute to a company-wide re-structuring program that was underway.

TBI’s Approach

The TBI team applied our basic methodology, adapted as necessary to the requirements of this engagement. Our comprehensive due diligence checklists were distributed to all three IT center management and interviews were conducted to confirm collected information as well as to explore other pertinent aspects of an outsourcing decision. Business leadership was also canvassed to better understand the overall impact of the IT organization.

It was especially important to explore the full “value proposition” of the current operation as well as reasonable alternative approaches. For instance, comparative investment analysis determined a relative measurement of this company’s financial commitment to IT. Another area for evaluation was the efficiency of the SAP design? How much customization of the basic product was implemented? How many Interfaces were required? What kind? How “transparent”? How many “user exits” were required?

Other organizational issues that were explored: Was the scope of services proposed for outsourcing the best functional mix? Would sustainable savings be possible? Were all three IT organizations needed? Could all be served by a service provider?

Successful Business Solutions

The Client received:

  • Comparability analysis to determine appropriateness of this Company’s investment in IT vis-à-vis other organizations who explored outsourcing.
  • An “IT Assessment” Report that:
    • Stated the project objective.
    • Presented a current situation analysis and findings.
    • Measured the current operation against “best practices”.
    • Assessed potential outsourcing opportunities and associated risks for several alternatives, and recommended an outsourcing strategy, consistent with stated objectives.
  • An “Executive Summary” and presentation to the CEO and CIO of the Company that set forth the highlights of the “IT Assessment” and focused on our findings and the financial and organizational opportunities of several outsourcing options.
  • A recommended outsourcing strategy.
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