In 2014 our client awarded a four-year outsourcing contract for the provision of IT services to a third party. However, some of the services were not accurately described or priced, with some being cross-subsidised. Furthermore, some services were delivered inefficiently, resulting in both a poor response time and a lack of scalability.
A lack of a timely and accurate MI was also evident, contributing to a lack of both expenditure control and quality control.
Once a consensus to continue the contract had been identified, an agreed non-binding Principles of Working (PoW) was produced – including a timetabled Service Change Programme. The PoW immediately managed two strategic Change functions (Portfolio Demand and Portfolio Office).
Of the services on offer, six were insourced to our client, 23 were re-defined and/or re-costed and five remained unchanged.
Through a focused and effective PoW change programme, contract savings of up to ~£1.1 million per annum could be realised.
Once these cost savings have been realised, the client can then decide whether to fully insource the service or retender once the contract is coming to an end.