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Sound vendor management impacts bottom line

By standardizing the way it manages its service providers, this insurer saves money and improves operations.


A newly appointed Chief Operating Officer of a North American insurer was brought in to improve global operations and drive a minimum of $2.5M annual savings. The first step was to gauge the performance and market competitiveness of several service and technology vendor relationships. He also wanted to understand the maturity of existing vendor management capabilities, and, specifically, the role and cost-effectiveness of the company’s offshore “captive” ADM operation.

Imagining IT Differently
Imagining IT Differently

Advisors at ISG were engaged to develop a sourcing strategy and feasibility plan that involved the review of 40 contracts across BPO, ITO, Hardware/Software and Network Services. In addition, advisors assessed the insurer’s existing captive capability in India, which was primarily focused on ADM activities, and provided improvement recommendations for the client’s Vendor Management Office (VMO) capabilities, which were recognized as immature and lacking in standard processes and procedures.

Future Made Possible

  • ISG delivered recommendations that identified annual savings of $10M to $15M in the ITO contracts, based on resources moving to the offshore captive.
  • Additional savings of 10 to 15 percent were identified across hardware, software and network services.
  • After delivering the plan, ISG was engaged to further improve the client’s sourcing strategy and help implement the recommendations.