In early 2014, this healthcare company engaged the market on its own to source the application maintenance and development for its SAP environment. It needed to replace a short-term agreement that ISG had helped structure in 2012. Although pricing indicated significant savings opportunities, the company-developed RFP led to high variability in the responses from service providers. This made it difficult for the project team to evaluate the proposals, articulate a clear down-select recommendation and get to signature with its preferred provider. An ISG director was engaged and embedded in the team to help quickly bolster it and provide subject-matter expertise and project leadership.
Imagining IT Differently
In three weeks, ISG developed a complete service description based on market best practices. The description included significant improvements in multi-vendor cooperation and proactive maintenance as well as significant leverage of knowledge management and "shift left“ ideas.
After leading the team through a down-select process, the ISG advisor completed a set of sourcing agreement documents and led the company through the final negotiation. The advisor’s experience led the company to signature-ready contract documents within 60 days of engagement.
Future Made Possible
- The company was able to realize significant savings. Though it had hoped for $5 million in savings, with ISG’s help, it obtained $17.4 million in savings – more than triple its original goal.
- The company also was able to implement modular or component-based pricing to facilitate potential future XaaS replacements of ERP modules.