Achieving Continuous Outsourcing Contract Improvements

Opportunity

Opportunity

One of the world’s largest producers of film, television, and music entertainment had an outsourcing contract for Finance and Accounting (F&A) services covering all towers:  Procure to Pay, Order to Cash, and Record to Report.  The client was not happy with the provider’s performance or price.  
The client initially engaged ISG to perform a benchmark of the existing contract in 2012.  This case study details the positive results of that benchmark, which then resulted in ISG being engaged three more times to benchmark performance and provide contracting advise on location strategy, service levels, and automation that resulted in continuous improvements in client’s F&A performance and price.
Imagining IT Differently

Imagining IT Differently

In the initial engagement, ISG provided benchmark data to establish whether the provider’s rates were competitive in their different locations in India, Poland, Guatemala and China.  In addition, ISG provided an extensive review of the staffing mix, on-and offshore staffing ratios, service levels, contract terms, as well as solutions to the clients F&A operations ‘pain points.
In subsequent engagement, ISG provided updated price benchmarks, but also address opportunities to improve the overall value – moving higher-level F&A work to provider, moving work from Tier 1 offshore sites to Tier 2 and Tier 3 locations, best practices in RPA and automation contracting, and most recently, a new contract review that provided for a digital transformation of the F&A process.
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Future Made Possible

  • ISG’s initial benchmark of the F&A contract found the provider’s current pricing was 35% over the market price and the client achieved well over $1M in annual savings.
  • Subsequent engagements achieved significant savings (>$4M annually) based on ISG’s analysis and recommendations to move work from higher cost locations to India, changing the staffing pyramid to be more fully leveraged with tighter span of control, and to accelerate automation opportunities using RPA and AI to achieve both cost savings and operational improvements.  
  • ISG is seen as client’s trusted advisor and is called on regularly to provide counsel on service levels, automation and operational issues, in addition to providing market data for price benchmarking.