Vendor & Contract Managment core system transformation and system outsourcing

Context & Objective

The client, undergoing an operating model transformation, required support in a workstream related to a core system transformation and legacy system outsourcing, to reach full potential of scale and efficiency.

PIR was brought in to set-up governance structures and manage commercial and contractual compliance of the external system integrator (driving implementation and system roll-out) and outsourcing partner (taking over services for existing legacy platforms).

Approach & Result

PIR was engaged to provide vendor management services, including establishing governance structures that supported the client's transformation and ensured commercial and contractual compliance to a set outsourcing agreement. To do so, PIR supported the client to set-up continuous follow-up on delivery and quality, costs, incentive mechanisms, and risk related to the outsourcing agreement, which enabled the client to achieve MSEK 3 in cost avoidance through identification of incorrect vendor invoices.

In addition, PIR supported the client by negotiating with the vendors, managing change requests, and providing support to decisions makers in understanding the outsourcing agreement and what consequences decisions and changes would generate. This resulted in that the transformation project could focus fully on project delivery, being assured that commercial and contractual perspective was managed.

Cost Optimization Sourcing Advisory

Industry: Financial Services

Cost Optimization

Cost optimization of indirect spend at ICA
Summary

To adapt to a new, more challenging market, ICA underwent a significant cost reduction program and re-organization. As part of this initiative, ICA approached PIR and Aurentor for assistance in reducing their indirect spend.

The project had an immediate positive effect on the bottom-line result and will in total reduce ICA’s indirect spend by 300 MSEK. This initiated a change in how ICA works with indirect procurement by introducing category management and instilling confidence when negotiating with suppliers, thereby shifting the scale in favor of ICA.

Background

In the face of shifting market trends, with premium assortments and stores giving way to low-cost and budget options, ICA found their position challenged. To remain competitive while managing the inflations raising costs of interest and supply, the company needed an overarching cost transformation.

One of the identified cost transformation opportunities was within goods not for retail where ICA hoped to reduce their addressable spend by 5-10%.

This target was highly ambitious and demanding, challenging the entire organization to find cross-functional cost opportunities within a decentralized structure. Many tough decisions had to be made with a top-down perspective, while they at the same time needed to stay true to the company's core entrepreneurial values, with bottom-up ownership. Additionally, the company underwent a major reorganization during the cost transformation, which increased uncertainty and raised the decision-making threshold, making cost prioritization difficult.

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Industry: Retail
Cost Optimization Sourcing Advisory

Insourcing, vendor managment, and SaaS procurement in HR transformation
The client, driving a large-scale HR transformation, required support with replacement of several business-critical applications (e.g., HR admin, WFM, Payroll), insourcing of outsourced HR services and establishment of an internal Shared Service Center (SSC).

PIR was brought in to advice the program management team on sourcing related enquiries, vendor- and contract management, and to support the client in managing the strong dependencies between contract and deliveries to ensure a successful transformation.

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Industry: Travel & Transportation
Cost Optimization Sourcing Advisory

Vendor management of critical infrastructure rollout projects
The client, concurrently managing seven business-critical infrastructure rollout projects, had discovered discrepancies in supplier invoicing and delivery. Due to absence of established contract management processes, the suppliers had on several occasions overcharged deliveries and submitted unnecessary change requests that caused delays to the projects' implementation timelines without any consequences. To ensure successful project delivery and increase suppliers' contractual and commercial compliance, the client required support in managing the complex contracts related rollout projects.

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Industry: Telecommunications

All Engagements

Vendor & Contract Managment core system transformation and system outsourcing

Context & Objective

Approach & Result

Cost optimization of indirect spend at ICA

Summary

Background

Insourcing, vendor managment, and SaaS procurement in HR transformation

Vendor management of critical infrastructure rollout projects

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