Strategic IT Sourcing Transformation Program

Acting as a strategic advisory partner to design and execute the IT sourcing transformation and operate as an extension of the executive and IT leadership teams, providing integrated support across strategy, sourcing, commercial design, and governance.

Client Context

The Challenge

Our Role

The client is a large multinational enterprise with complex, business-critical operations spanning multiple geographies. Its Information Technology (IT) function supports a diverse set of business units and operational environments, resulting in a highly heterogeneous technology landscape.

Over time, the IT operating model had evolved into a fragmented sourcing environment, with multiple external providers delivering infrastructure, network, application, and support services under separate contractual arrangements. While this model had enabled growth and flexibility in earlier years, it had become increasingly misaligned with the organisation’s efficiency, integration, and transformation objectives.

At the outset of the engagement, the client’s annual IT services spend was in the high eight-figure USD range, with cost pressures increasing year-on-year. Leadership recognised that incremental cost optimisation was no longer sufficient and that a structural reset of the IT sourcing and operating model was required to unlock meaningful, sustainable value.

The client faced a combination of strategic, commercial, and operational challenges:

Structural cost inefficiency

The fragmented sourcing model limited economies of scale and reduced commercial leverage. Despite multiple optimisation initiatives, the IT cost base remained stubbornly high, with limited flexibility to respond to changing demand.

Siloed service delivery and weak end-to-end accountability

Services were delivered across discrete technology towers, resulting in fragmented ownership. Operational issues frequently crossed supplier boundaries, creating delays, inefficiencies, and disputes between providers.

Misalignment between service metrics and business outcomes

While contractual SLAs were largely being met, business stakeholders continued to experience inconsistent service quality. Performance reporting focused on technical compliance rather than real operational impact.

Legacy commercial constructs and embedded risk

Existing agreements contained inconsistent pricing models, limited scalability, and restrictive termination provisions. These factors introduced material financial risk and constrained the client’s ability to change its sourcing model.

A narrow window for value realisation

Executive leadership had defined a clear timeframe within which IT was expected to deliver a step-change in efficiency. Achieving this within the constraints of ongoing operations required a carefully structured, enterprise-wide approach.

Taken together, these challenges led the C-suite to mandate a strategic IT sourcing transformation, with the explicit objective of materially reducing run-rate cost while improving service capability, resilience, and accountability.

The client engaged our firm as a strategic advisory partner to design and execute the IT sourcing transformation. We operated as an extension of the executive and IT leadership teams, providing integrated support across strategy, sourcing, commercial design, and governance.

Our role included:

·       Designing the future-state IT sourcing and operating model

·       Developing a robust financial and value-engineering framework

·       Executing a structured RFI and RFP process

·       Supporting vendor evaluation, BAFO negotiations, and executive decision-making

·       Designing the commercial, contractual, and governance constructs underpinning the new model

Throughout the engagement, our focus was on enabling high-quality decisions at the C-suite level, supported by rigorous analysis, clear options, and a deep understanding of commercial and operational risk.

Approach & Methodology

Expected Outcomes & Value

Conclusion

Strategic Baseline and Design

We began by establishing a detailed understanding of the current state, including service scope, spend baselines, performance issues, and contractual constraints. This informed the development of a target operating model designed to:

·       Improve end-to-end accountability

·       Simplify service integration

·       Enable scalable, consumption-aligned commercial structures

·       Support continuous improvement and innovation

Independent benchmarking, including network services, was used to establish realistic should-cost ranges and performance expectations.

Market Engagement – RFI

Before launching a formal RFP, we supported the client in conducting a Request for Information (RFI). The RFI was used to:

·       Test market capability to deliver an integrated, multi-tower service model

·       Validate assumptions around cost, capability, and transformation readiness

·       Refine scope and requirements based on market feedback

Insights from the RFI materially improved the quality and competitiveness of the subsequent Request for Proposal (RFP).

RFP Execution and Evaluation

A comprehensive RFP was then issued covering the full scope of in-scope IT services. Our team coordinated all aspects of the process, including vendor briefings, clarifications, and structured evaluations.

Proposals were assessed across multiple dimensions:

·       Commercial value

·       Service capability and resilience

·       Transformation and improvement roadmap

·       Contractual risk and flexibility

BAFO and Value Engineering

Following down-selection, we supported an intensive Best and Final Offer (BAFO) process, applying a strong financial and value-engineering lens. This was a critical phase in delivering value and included:

·       Re-engineering pricing structures to better align with demand and consumption

·       Reducing structural cost through scope rationalisation and service integration

·       Designing mechanisms to absorb or defer transition and transformation costs

·       Actively mitigating termination exposure embedded in legacy agreements

·       Strengthening performance and service quality incentives

Through this process, our team was instrumental in driving material improvements in both cost and commercial risk profile, while simultaneously enhancing the service model.

Executive Decision Support and Commercial Design

We supported the executive team with scenario-based analysis, clearly articulating the trade-offs between options. Based on this analysis, the C-suite made a deliberate decision to pursue a single-partner operating model, recognising it as the most effective way to achieve scale benefits, accountability, and long-term capability uplift.

While the program did not proceed to full implementation, the sourcing strategy, commercial framework, and operating model were designed to support this strategic direction.

By the point the program reached its final governance milestones, the IT sourcing transformation was expected to deliver significant value across multiple dimensions:

Cost and Financial Impact

·       Projected run-rate cost reduction in the range of 40–50%

·       Expected multi-million USD annual savings

·       Improved cost predictability through redesigned pricing models

·       Reduced upfront financial exposure through value-engineered transition constructs

·       Material mitigation of termination liabilities associated with legacy agreements

These outcomes were driven not only by competitive tension, but by deliberate commercial architecture and value engineering applied throughout the process.

Capability and Service Quality Uplift

Equally important, the redesigned model was expected to materially improve IT capability:

·       Clear end-to-end service ownership

·       Improved service consistency and resilience

·       Stronger alignment between service performance and business outcomes

·       Embedded continuous improvement and innovation obligations

·       A more scalable and future-ready IT operating environment

Governance and Strategic Flexibility

The program also established a robust governance framework designed to support long-term value realisation, including:

·       Transparent performance management

·       Clear escalation and accountability mechanisms

·       Ongoing commercial competitiveness through benchmarking and review

·       Flexibility to adapt the operating model as business needs evolve

This engagement demonstrates how a strategic, design-led IT sourcing transformation can enable large enterprises to simultaneously address cost, capability, outcomes and risk.

By combining rigorous analysis, disciplined market engagement, and strong financial and value engineering, our team enabled the client’s executive leadership to make a confident, high-impact decision about the future of its IT operating model.