Enterprise IT Outsourcing

Project Background

The client is the global leader in sports apparel and equipment, composed of multiple lines of business, functional and regional units. The client’s outsourcing objective is to deliver non-strategic and selected strategic information technology products and services through outsourcing alliances with external service providers. This is a key strategy supporting the client’s overall goal of gaining operational efficiencies by better aligning information technology with business requirements.

The client has a corporate information technology organization as well as IT Directors in each of the distributed business units. The corporate information technology organization is responsible for corporate infrastructure and IT planning and finance functions. Corporate IT runs a mainframe data center on a 7X24 basis which includes two mainframes, a number of Unix boxes, multiple servers, a help desk and voice and data communications facilities.

Problem Summary

The client desired to evaluate strategic outsourcing options and service providers to determine if the outsourcing objective could be realized in a short time frame, with due consideration for the personnel involved and at an attractive price. The client also wanted a service provider who could provide additional services in the future such as ERP application development and maintenance and international infrastructure support.

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 Data Center department managers and interviews were conducted to confirm collected information as well as to explore other pertinent aspects of an outsourcing decision. Adjacent functions, such as Application Services were also canvassed to better understand the overall IT organization. An RFP document was created and distributed to a selected list of potential service providers.

Selected service providers responded to the RFP and TBI led a team effort to evaluate and down select to two vendors for a “best and final offer”. The two vendors had strengths in different functions so evaluation criteria to allow a comfortable comparison were critical.

Once a decision was made much time was then spent of contract negotiations and a manageable transition plan. A new data center facility had to be built because the client wanted to continue to use the space of the existing data center.

Successful Business Solution

The client achieved the strategic objective they were looking for: the chosen service provider was able to better align IT services with corporate business objectives and business unit operation. This was achieved also at a lower cost to the client of 14% (on a non-discounted basis) over the 5 year term of the agreement. In addition the transfer of personnel was handled quite effectively and efficiently with most IT personnel choosing to go with the outsourcing vendor. The service provider is currently proposing on an expansion of responsibilities that was originally envisioned as a future direction.

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