Transport & Logistics Company
Services sourcing through a competitive IT service provider ecosystem
Objectives
The goal was to create service and role categories tailored to the market, nurturing a competitive vendor ecosystem that encourages participation from all through incentivization.
Sourcing Topics
Time & Materials to Services
Role Based Sourcing Model
Portfolio Segmentation and Consolidation
Situation & IT Landscape
Strategic partnerships existed with more than 30 IT service providers.
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The challenge was balancing the need for internal stakeholder flexibility in setting requirements with the simplification of the service catalogue. Additionally, ensuring competitive incentives that cater to large vendors while also attracting smaller, innovative firms.
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Portfolio consisted of 5,000 applications hosted in datacenters and in the Cloud across Europe.
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The tech stack was highly heterogeneous due to the size and historical acquisition-led growth of the company.
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Projects covered both standard enterprise management applications as well as more domain specific operational initiatives. These require technical know-how specific to the relevant business units.
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Our Approach
Creating a service catalogue that aligns standardized roles and technology categories with both internal and market-oriented procurement practices was identified as a top priority. This initiative aimed to streamline and standardize the procurement process, making it more efficient and transparent for all stakeholders involved.
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Additionally, the sourcing and provider ecosystem strategy sought to optimize the number of service providers while fostering increased participation and allowing for the dynamic addition of new entrants. By reducing the number of providers, the organization aimed to simplify management and oversight while still ensuring access to a diverse pool of expertise and capabilities.
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To address key risks such as non-bid or price-dumping, a transparent competitive mechanism was defined. This mechanism aimed to create a level playing field for all vendors, ensuring fair competition and encouraging the submission of high-quality proposals.
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Moreover, the tender for the initial ecosystem creation was structured with multiple sub-streams. This approach enabled large firms with broad service portfolios as well as specialists to bid without penalties, ensuring that all types of vendors could participate effectively in the procurement process.
Our Impact
Established an ecosystem comprising fewer vendors across designated service categories, encompassing both generalists and specialists with enhanced value propositions, particularly in specialized areas like data and artificial intelligence (AI). This approach achieved vendor consolidation while fostering greater competitiveness and performance within the ecosystem.
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By implementing a standardized role and service catalogue aligned with market standards, the organization streamlined the procurement cycle and simplified internal processes. This standardized approach facilitated clearer communication and decision-making, leading to greater efficiency and effectiveness in procurement activities.
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Furthermore, the establishment of technology categories provided a dynamic framework for considering service prices based on the use of premium and common technologies. This categorization allowed for more flexibility in pricing strategies and enabled vendors to offer tailored solutions based on the specific technology requirements of the organization.