EricBBighams' BLOG ( 181 articles!)
Delivering Incremental IT Cost Reductions - Views ( 1987 )
Author: EricBBigham , Last Modified, 2022-01-03 Category: business Keywords: Delivering-Incremental-IT-Cost-Reductions
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Delivering Incremental IT Cost Reductions
Case Study - Delivering Incremental IT Cost Reductions circa £3.9M through Rebased Rolling Forecasts
OVERVIEW
My client, a Commercial Director for a Global Management Consulting Firm, faced a particular challenge when her client, COO of a Major UK utility provider, wished to reduce her IT Infrastructure costs, from circa £60m, and so requested a solution.
The incumbent team lacked the necessary capacity to meet this detail oriented COOs' immediate requirements, non delivery was not an option and would spell disaster, a solution had to be found and found yesterday!
HIGH IMPACT MANAGEMENTâ„¢ PROPRIETARY CONSULTING APPROACH
PROJECT SUMMARY
I was engaged to re-design a more effective client facing solution. We undertook critical analysis of more than 40 service providers and their costs and constructed a suite of interconnected models (the solution). It was later presented to the client; who's remarks were "this is the best piece of work I have ever received..." (the consultant).
Needless to say the model was adopted and went on to became the "go to" source document for a large commercial team. It formed a keystone in the clients' contractual relationship. KPI metrics would determine my clients P&L and thus her profitability.
PROJECT APPROACH
KEY SOLUTIONS DELIVERED
- Three year, monthly rolling accruals based cost forecast (past, present and future).
- Price / volume Variance analysis of Actual to Plan and the Forecast Outturn.
- Quarterly Cash Flow re-forecast.
- Cost control over a service provider pool comprising in excess of 40 companies.
- Project management costs controlled for a large team of project managers.
- Reconcile 6,000 lines and circuits BT and Vodafone telemetry inventory database.
- Dashboards designed for KPIs and Graphical Trend analysis. Consumption data and tariff tracking to support contract negotiations.
ESTIMATED INCREMENTAL SAVINGS £3.8M - EVA £21M
The solution was capable of forecasting IT infrastructure costs to within a 1% tolerance of accuracy versus the plan. A tolerance that was in fact a KPI contractual obligation. We used graphical analysis to effectively scan cost trends and highlight material variances.
We identified many abnormal cost patterns across several key service lines. This in turn led to service investigations. We won several cost rebates from major Telecom providers on behalf of the client. One month we recovered £250,000 from BT alone, and many thousands from one supplier, who delivered notoriously poor billing accuracy to the client.
Needless to say the cost savings amounted to many multiples of our fees.
Eric Bigham FCCA is the Founder and Chief Executive Officer at Bigham Consulting
Email - eric@bighamconsulting.co.uk
Telephone - +44 0788 057 0850
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Keywords:Delivering-Incremental-IT-Cost-Reductions
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