Global Pharmaceutical Company Tackles Multi-Million Dollar IT Outsourcing Initiative Take a pdf of this article with you At a Glance Company Profile The company is a global biopharmaceutical and related healthcare products company with thousands of employees around the world and billions in global sales. Services Featured Service Delivery Model Sourcing Strategy Business Case  Outsourcing Selection  Negotiation and Contracting  Transformation  Relationship Management and Governance Business Processes Involved Systems Operations and Management Desktop Management Help Desk Services  EquaTerra Enables Company to Diversify Risk and Achieve Savings on IT Infrastructure Services Executive Summary A leading global pharmaceutical company turned to IT outsourcing to lower costs, improve IT efficiencies and diversify risk within its IT operation. With a sound relationship in place with EquaTerra and internally aligned executives with a shared vision, the company was able to establish and execute an end-to-end IT outsourcing deal with a single provider worth more than $700 million. Business Challenge Having experienced successful outsourcing initiatives previously executed in its HR and Finance functions as well as portions of IT, this leading pharmaceutical company decided to investigate additional outsourcing opportunities within its IT function. The company’s objectives included: Reduce IT costs – The company wanted to reduce spending and move toward a "utility" model with an enhanced service catalog. Diversify operating risk – At the time, the company’s IT infrastructure operations were concentrated into a single, internally-owned and operated service center. To reduce the risk of an IT outage, the company needed to create some IT redundancies. Global messaging transformation – The company had an internally developed and supported email platform and was looking to migrate to Microsoft Exchange globally. Having worked on previous outsourcing projects with EquaTerra, and having found success with each, the company immediately engaged EquaTerra to help it make its new outsourcing vision a reality. How We Helped EquaTerra conducted a strategy engagement and built a business case around IT outsourcing. The assessment helped the company determine the scope of the undertaking as well as helped it look at and assess various ways to approach how it could deliver IT services. EquaTerra also helped to select potential service providers that it believed would best meet the company’s vision for a more efficient, cost-effective and diversified IT operation. EquaTerra assisted the company though the entire end-to-end sourcing process from developing the RFP to reviewing responses, selecting a provider, managing negotiations and ultimately finalizing a contract that involved the opening of a second global IT service center. The sourcing process was conducted quickly over five months, as the company trusted EquaTerra’s advice and processes. This enabled the company’s executives to cut through the clutter and take quick action. Further, the company retained EquaTerra to help with post-contract governance processes, as well as help it structure and manage its provider relationship. Results Overall, EquaTerra helped this company come to an infrastructure and end-user computing contract with its provider worth $715 million. Part of the deal required a large piece of the company’s IT operations to be run out of a data center in the Midwest. Having two global IT data centers enabled the company to avoid having all its IT "eggs in one basket," and provided the much needed IT delivery diversification a company of this size needed. The two data centers incur several redundancies to cover bases should an IT outage at one center arise. The multi-million dollar contract also helped the company significantly reduce its IT costs, as the company now only pays for the services it receives ("utility" approach). Plus, the company now has access to broader technical capabilities through its provider. Advisor Insights The EquaTerra team offers the following insights into why this engagement has been so successful for this leading pharmaceutical company: Company received strong commitment from top to bottom: The company’s top executives were forthright and articulate in their company’s vision and strategy and in their support for outsourcing in reaching that vision. This support from the top virtually eliminated delays that are typically experienced in outsourcing deals of this nature and thereby allowed for a swift and strategic IT sourcing strategy to take hold. Company had previous experience with outsourcing: One thing that other companies going through an outsourcing initiative should note is that outsourcing deals get easier with time and experience. Because this company had been involved with several other outsourcing deals in the past (HR and Finance), it knew what to expect and how to make the process work. Plus, it also had developed a sound relationship with EquaTerra and trusted the advice it received from the advisors. Overall, experience and an established trusting relationship with an outsourcing advisor can make each sourcing undertaking a little less taxing and a lot more productive for all parties. About EquaTerra EquaTerra sourcing advisors help clients achieve sustainable value in their IT and business processes. Our advisors average more than 20 years of industry experience and have supported more than 2,000 transformation and outsourcing projects across more than 60 countries. Supporting clients throughout the Americas, Europe, and Asia Pacific, we have deep functional knowledge in Finance and Accounting, HR, IT, Procurement and other critical business processes. EquaTerra helps clients achieve significant cost savings and process improvement with internal transformation, shared services and outsourcing solutions.