Case Study in IT: Strategy (2)
Billion Dollar Spinoff Enabled with New IT Footprint
While technology continues to advance in functionality and business value, IT managed services contracts are becoming more complicated. Negotiating such contracts for large, complex organizations in transition requires a strategic approach and unique experience. And it's not just about SLA's, terms, and fees. You are negotiating a relationship between two groups of people, not a transaction. And with people, things are always subject to unknown variables, expectations, and changing.
Our customer, a $1 billion global company with extensive legacy IT infrastructure and increasing business demands for new technology, was spinning out of a larger organization. You can imagine the laundry list of challenges that presents. At a macro level, they needed to continue supporting the business while creating an independent IT infrastructure. To do it right, it was critical to understand their current business demands while preparing a footprint for the future. Add to that a compressed timeline and a customer leadership team with limited experience in managing this magnitude of a transition. A critical piece of the strategy was negotiating managed services contracts. Except in this situation, negotiating five multi-million dollar contracts was required...all at the same time.
Enter GuideIT. As their strategic advisors, we agreed to provide strategic support in the business negotiations for the managed services agreements. Initially the process required normalizing bids from vendors by analyzing the pricing and solutions so the customer could make decisions. Very early in the process, the customer also developed trust in us and chose to elevate our role as the primary business decision maker. The framework for services and vendors included: data center, end user computing, security: Dell, HP, and IBM | data and voice network: AT&T, BT, and Verizon | call center and voice applications: Avaya and Cisco | service management platform: Dell, HP, and ServiceNow.
GuideIT provided experienced consultants to lead the negotiations with each vendor on behalf of the customer. In partnership with the customer's outside legal counsel, GuideIT negotiated the scope of work, service levels, pricing, and business terms for each agreement. The result was five successfully executed global managed services agreements with fair and consistent terms within 9 months. Normally, a single agreement of this magnitude requires 6 to 9 months to negotiate. GuideIT drove focus and efficiency in the process enabling deadlines to be met while helping to establish and build those key relationships. Additionally, the customer's leadership team was free from the distracting demands of negotiations so they could remain focused on meeting daily business demands. "We could not have completed these agreements without you. You are critical to us getting separated into our own entity", said the CIO.