IT services contract review

A leading global provider of professional assurance services, our client helps businesses manage risk, improve sustainability, and achieve their goals. With a globally recognised brand, it is a trusted partner to a diverse range of clients across more than 120 countries worldwide.

Operating in industries as varied as aerospace, automotive, food and beverage, and healthcare, the company offers services that include certification, training, assessment, and verification— all designed to help organisations improve efficiency and effectiveness.

Supported by a global network of over 6,000 employees and contingent workers, this industry leader brings extensive expertise and knowledge to assist businesses in achieving their objectives.

Challenge

As part of a private equity carve out, our client had appointed a strategic partner to provide a SIAM function and deliver run services for its core platforms.

Due to the time pressures of the separation programme, and the focus on exiting a Transition Service Agreement (TSA) with the selling party, the contracting process was abridged and heavily reliant upon the strategic partner providing the services they believed to be required based on their “standard” approach and information gathered from their involvement in the provision of services during separation planning. To compound matters there had been significant attrition in the client’s senior leadership team, meaning many of the executive committee members were not aware what had been contracted for and the rationale for what was a high value five-year deal.

The suboptimal contracting process meant that once the services were live the client’s business were expressing high levels of dissatisfaction with the service being provided, and the executive committee wanted to understand if the contract and services being delivered offered value for money, or if an alternative partner and/or approach should be considered.

Solution

Working closely the client’s IT leadership team and procurement function, we rapidly performed a comprehensive analysis of the contract to develop an executive summary of the agreement in place.

Building on this initial analysis, we then captured the key issues and risks associated with the contracts structure – highlighting areas where e.g. the risk profile was unacceptably high, services were being delivered that were not required, or where there were service gaps that needed contracting for under a change note.

We also analysed the pricing structure of the contract, to make it clearer to the leadership team where the price levers were and how they could potentially be used to reduce costs.

As an additional measure, we also analysed current and historic service reports from the strategic partner – bringing attention to where there were potential issues with the providers reporting and known service issues that did not appear to being addressed.

Our recommendations included the revision of the contract to better align to the business’s needs, and to deliver a more optimal service that could operate at a reduced price. We also made clear recommendations around the need for associated change in the client’s operating model, and behavioural and process changes the client’s team would need to make to get maximum value from the relationship.

Outcome

As a direct result of our work, our client’s CIO and Procurement Director had a significantly improved understanding of the agreement that had been signed with the service provider, including where there were gaps, risks and issues that needed to be addressed.

We left the client with a clear set of next steps to enable them to renew and refresh their relationship with their strategic partner – avoiding the need for costly contract disputes or unnecessary termination of the agreement.

If you would like to speak to one of our industry experts regarding this case study, email contact@masonadvisory.com. Find out more about our services.