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IT infrastructure outsourcing financial analysis

In this case study, WGroup helps a multinational Healthcare services company examine risks and benefits of outsourcing IT infrastructure and recommends In-house solutions. WGroup approaches an evaluation of sourcing options by collecting quantitative and qualitative information, related to the client’s challenge and constructing models that provides objective analysis and market comparisons of suitable solutions.

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IT infrastructure outsourcing financial analysis

  1. 1. Opportunity The impact of a poorly planned and executed outsourcing transition is extensive, and the financial, operational and human capital implications are significant. Having decided to outsource its SAP applications maintenance and selected an outsourcing service provider, the client recognized that they would need guidance to navigate the complex transition to a remote call center and service delivery center. They would need a trusted partner who could facilitate a process to avoid the pitfalls and ensure that the outsourcing implementation would occur on-time, with as little disruption as possible, and set the stage for a successful outsourcing relationship. The client required specific help in the gathering and presentation of data and to facilitate key areas such as: • Program management of transition milestones and deliverables • Process definition to accommodate the new SAP model • Coordination of knowledge transfer activities, and • Synchronization of transition activities by linking the efforts of the client and outsourcing service provider. Because they recognized WGroup’s extensive experience with the complex issues involved in an SAP outsourcing transition, and because WGroup had successfully helped them in determining the need for outsourcing and in selecting an outsourcing service provider, they selected WGroup for the engagement. Approach Successful outsourcing transitions require careful management of interdependent activities and attention to detail. WGroup worked with both the client and the service provider to navigate smoothly through identified challenges, anticipate unexpected challenges, and help the client mitigate risk and maintain control throughout the process, all the while adhering to timelines. WGroup undertook several linked, concurrent efforts. Because the outsourcing service provider had been selected in part because of its excellent transition methodology, the WGroup team prepared a client-centric transition plan that coordinated with and complemented the outsource service provider’s transition plan. WGroup leveraged its insight and experience to improve Drive Your Business SAP Applications Outsourcing Transition Leading Health Care Organization Navigates through a Complex Transition Process Health Care & Life Sciences | SAP Outsourcing 1 WGroup’s extensive knowledge of transition processes and SAP combined with their experience in risk and issue management, from both the client and service provider perspectives, ensured the project delivered seamlessly and on-time in 6 months.
  2. 2. Value Delivered Beyond strong program management and facilitation, WGroup brought deep knowledge and experience in outsourcing transition management to the client. Even though the client had experience with previous outsourcing engagements, it did not retain the skills ready for a complex outsourcing transition. Outsourcing transitions are discrete events and are not core skills the client retained and invested in over time. WGroup was able to facilitate a transition in 6 months, as planned, by helping the client prepare for potential problems, resolve unexpected issues and work seamlessly across the client and service provider cultures. Thanks to WGroup’s detailed understanding of the skill sets required to manage development and support, aligning the client with the service provider’s service management model, and asking the right questions during service tests, the client was able to conduct business as usual without interruption. WGroup’s consistent efforts to align the client and outsourcing service provider ensured that both viewed the transition process and outcome of the engagement positively. WGroup also helped negotiate liability clauses in the contract that satisfied the client’s risk management concerns and held the outsource service provider to performance requirements it believed to be reasonable. The WGroup team also provided additional value to the client with regard to staff changes. Working with the outsourcing service provider, WGroup arranged for several key client personnel to make their own transition—to the outsource service provider’s staff. the provider’s understanding of transition objectives, activities and dependencies; to identify next steps and contingencies; and to shorten the planning cycle. At the same time, WGroup facilitated the development and implementation of a governance framework, practices, and reports. Insights and Advice The complex process of creating a service management model for SAP applications poses unique challenges. Because the client is in the health care business, those challenges are further complicated by risk and liability issues due to HIPAA regulations. WGroup’s extensive combined experience in transition management, SAP and the health care industry enabled them to meet those challenges. WGroup made sure that their transition approach brought the client to the service management model without creating any issues for the organization. Other critical components of the successful transition included: • WGroup’s thorough understanding of skill sets required to manage development and support; • Due diligence that provided important transparency for the client • Development of a knowledge repository of all SAP and non-SAP solutions; and • Service tests with service desks before going live that resolved important questions without impeding everyday business. Contact Us WGroup 301 Lindenwood Drive, Suite 301 Malvern, PA 19355 610-854-2700 Copyright © 2013 WGroup. All Rights Reserved.2 002_MKSPAOTCS_021813 About WGroup Founded in 1995, WGroup is a boutique management consulting firm that provides Strategy, Management and Execution Services to optimize business performance, minimize cost and create value. Our consultants have years of experience, both as industry executives and trusted advisors, to help clients think through complicated and pressing challenges to drive their business forward. For more information on WGroup, visit