Global Retail Client Uncovers up to $3.4M in Rate Savings in Multi-Provider Assessment

Overview

A $50B global retail client had undertaken efforts to drive greater efficiencies from their IT Service Provider base. The client identified four key IT Services Providers to perform a market assessment: Accenture, Cognizant, Wipro, and TCS.

UpperEdge was engaged to help the client perform a benchmarking exercise against these providers to determine the best fit.

Approach

The client shared all relevant MSAs and supporting SOWs for all in-scope providers with UpperEdge.

Following UpperEdge’s proven Cost Optimization process, we conducted the following assessments of the client’s prospective providers:

• Contracts Assessment: Complete tear down and market comparison of expected, industry best practices terms vs. the contracted terms established at the Master and SOW levels of IBM services
• Financial Assessment: Mark to Market provider-specific benchmarking of rates, resource units, rate locks, COLA caps, volume discounts and productivity
• Service Delivery Assessment: Provider specific benchmarking of Service Level Frameworks and individual service level terms
• Opportunity Assessment: Quantified gaps to market identified in the prior 3 assessments that generated real savings targets and identified negotiation leverage to secure concessions

Negotiated Outcome

Based on the results of UpperEdge’s benchmarking, UpperEdge identified several renegotiation and renewal opportunities for each provider.

Provider Specific Opportunities:

• Accenture:
  • Uncovered that their proposed rate increases were not supported by UpperEdge’s benchmarks. Year-over-Year COLA increase kept rates almost in line with the market
  • $3.4M saved per year in rate costs
  • Confirmed their COLA / VDA was highly competitive
  • VDA included a $20M annual commit, which was 10% all of the client’s IT spend
• Cognizant:
  • ~$500K saved in rate costs
  • App Services 3% of what; I&O Competitive; QA 6-7% US / UK not sure what this means;
  • Confirmed their COLA & VDA were competitive
• Wipro:
  • $300K saved in rate costs for App Services (4-5% Domestic / Nearshore and 6-8% Offshore); QA: 3% across all roles
  • Confirmed their COLA was competitive
• TCS:
  • Highly competitive rates relative to the market
  • Share Shift Savings Range: $0 (do nothing) – $2.5M if award Cognizant (non-SDM) and Wipro spend

At UpperEdge, we help clients conduct multi-provider assessments to ensure you are getting the most competitive deal possible from your Service Providers. Explore our IT Cost Optimization Advisory Services to see how we can help.