ISG helps a capital goods company create lasting cost optimization and a reliable base case for the transformation program.
Opportunity
A leading company of industrial electronics and electrical equipment has over 100,000 employees, more than $25 billion revenue and a global footprint. It wants to increase the transparency of its IT costs and to validate how they are positioned compared to the market.
Furthermore, the company wants to restructure the overall application management delivery model and the underlying sourcing structure. It needs a standardized view on the current application portfolio and an evaluation of optimization potentials in terms of efficiency optimization and changes in the operating model.
Furthermore, the company wants to restructure the overall application management delivery model and the underlying sourcing structure. It needs a standardized view on the current application portfolio and an evaluation of optimization potentials in terms of efficiency optimization and changes in the operating model.
Imagining IT Differently
ISG analyzed the overall IT costs and identified significant optimization potentials especially in the “application management” part.
ISG also provided further drill down to roughly 300 enterprise resource planning (ERP) and non-ERP applications. This drill down shows details about which applications are driving the total costs. IT also provided the company with information about which areas synergies, consolidation potentials and efficiency optimization could lead to lower costs.
The cost analysis has given the company the necessary transparency to support the transformation program and the related business case calculation.
ISG also provided further drill down to roughly 300 enterprise resource planning (ERP) and non-ERP applications. This drill down shows details about which applications are driving the total costs. IT also provided the company with information about which areas synergies, consolidation potentials and efficiency optimization could lead to lower costs.
The cost analysis has given the company the necessary transparency to support the transformation program and the related business case calculation.
Future Made Possible
- The company received ISG’s identification of optimization potentials of over $25 million in run costs.
- The company will be able to realize these savings through consolidation, efficiency increases and operating model changes (including moving to public cloud).
- Overall, this project has led to a significant and lasting costs reduction for the company.
