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Case Study

Maturity in governance optimizes sourcing value

ISG helps a drugstore chain put governance in place to manage a new multi-sourced environment.

Opportunity
Opportunity

After a massive enterprise growth initiative to drive significant cost reduction and staff efficiencies, our drugstore chain client had multiple suppliers but no experience managing such an environment. 

Imagining IT Differently
Imagining IT Differently

ISG designed and operated a governance structure to minimize value leakage and ensure end-to-end contract compliance for all outsourced services. Under a tiered solution aligned with the client’s business need, preferred providers are governed via 10 processes, and lower tier providers are governed via six processes.

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Future Made Possible

  • Identified value leakage of $22 million over four years
  • Identified nearly $61 million in cost savings opportunities from effective governance
  • Freed the client’s global sourcing office to focus on strategic partnerships and negotiations
  • Implemented sophisticated financial reporting that enabled “what-if” scenarios for strategic negotiations between the client and service providers
  • Improved access to skilled resources on-demand, supporting increased volumes on an as-needed basis at no additional cost to the client
  • Increased governance maturity for improved controls and reduced audit and supplier risk.