The client is a major underwriting and broking company and is the UK’s 6th largest motor insurer. Its broking business focuses on car, home and motorbike insurance. Alsbridge were engaged to lead the renegotiation of an existing IT outsourcing contract worth £200m over 10 years. Processes in scope comprised all IT functions including infrastructure, service desk, network (data and voice), applications management and development.
The client had unsuccessfully tried on many occasions to reduce charges (using benchmarking), realign the contract and to make improvements. The client also recognised that in order to make sustainable improvements it needed to assess and improve its retained organisation and governance structures to ensure these were fit-for-purpose. Alsbridge were engaged to deliver on both of these objectives.
Alsbridge helped the client secure cost savings, make the charges more transparent, made the contract current and clarified a number of aspects of the contract to make it easier to manage.
We assessed the retained organisation in term of its capabilities, requirements to support the business in the future, assessing demand from the business to estimate total number of FTEs required and implemented best practice to achieve improved performance.
As well as assessing the retained organisation, Alsbridge also conducted a detailed assessment of the current governance structure (meetings, reporting and escalation) and implemented a more streamlined structure to support both the client and the supplier.
The Alsbridge team secured cost savings of over 20% (£3m per annum) for the client, as well as assisting them transition to a new retained organisation that would better support the business. In addition the new retained organisation would be able to challenge the supplier in a constructive way to ensure that the right IT solutions were developed and that the right service was delivered.
“I worked with Alsbridge over a period of four months to re-establish control and commercial management of an outsourcing contract, which was 5 years in to its 10 year term. Efforts to achieve a change in the relationship with the outsourcer had failed several times previously and this attempt was scheduled to be the last step before litigation. The assignment was in fact a major success for my business and not only delivered a 20% saving in annual costs (some £3m pa) but also a very positive change in the nature, professionalism and openness of the relationship with the outsourcer. I have no doubt that the work done will achieve further significant business benefits over the remaining term. The Alsbridge team’s tenacity and knowledge was a significant contributor to that success and their experience and knowledge ensured a constructive and balanced approach. I would not hesitate to recommend Alsbridge for a similar assignment.”