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Leading Hospitality and Travel Firm |
Fortune 500
Travel and Hospitality Industry
Suppliers: N/A
Scope of service: Our client already had
experience in offshore outsourcing and globalization. In fact, they had
relationships with five offshore companies and a minority ownership in a joint
venture in India. However, they did not have strategic partnerships nor did
they have a combined focus on how to leverage global service delivery models.
Our client asked neoIT to assess their services portfolio, create a
globalization plan, develop a financial business case, and organize and conduct
a discovery and assessment visit of key offshore locations.
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Background
Our client is primarily a provider of travel and residential real estate
services, has amassed a dynamic portfolio of complementary travel distribution
businesses that make it one of the most geographically diverse and vertically
integrated travel distribution companies in the global travel industry.
Business Challenge
In 2004 our client wanted to take a new look at globalization and ensure that
what they were doing was in line with their overall strategic objectives.
Still, their number one reason for reviewing their strategy was to identify
aggressive cost savings across five business units. Along the way they also
discovered that they wanted to manage delivery risk, execute quickly, gain more
control of Intellectual Property, increase resource variability and increase
productivity.
Our client already had experience in offshore outsourcing and globalization. In
fact, they had relationships with five offshore companies and a minority
ownership in a joint venture in India. However, they did not have strategic
partnerships nor did they have a combined focus on how to leverage global
service delivery models. They were not sure if they would be able to define an
approach that would allow them to leverage their current partnerships, work
with highly customized applications, diversify their global strategy, execute
quickly and create a collective approach across all five business units. So,
they decided to look for outside assistances.
Solution
neoIT and the client team worked together to achieve success in four main
areas:
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Portfolio Assessment
Process:
neoIT provided the client with a way to perform an inventory of all possible
applications which could be offshored. All 5 business units pulled together
detailed information on their respective applications, complexity, number of
FTEs, and the roles which were currently being performed or would need to be
performed in the future. T his fed into a process of determining which
applications could be offshored and what percentage of FTEs could be
transitioned.
Value:
Our client was able to compare all applications across all 5 business units in
a consistent manner which made the decision making process much more efficient.
It also allowed the key stakeholders to be able to inventory all the work using
the same process, which was previously not possible.
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Financial Baseline
Process:
neoIT developed a financial model to outline base costs as well as the impact
of savings over a 5 year period. All major application areas (over 25
applications) were evaluated to identify the savings potential for our client.
Specifically, detailed quarter-by-quarter for the first 2 years and yearly
projections for the remaining 3 years were pulled together to ensure all
savings potential were reasonably captured. One time costs (e.g., telecom,
travel costs, etc.) were also considered.
Value:
Our client was able to see the impact by each business unit as well as plan a
5-year scenario. This process allowed them to make meaningful and solid
decisions as the strategy was developed.
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Strategy Development
Process:
At the beginning of the project, neoIT facilitated a workshop forum for all key
stakeholders to identify the major reasons the client was considering offshore.
Additionally, neoIT interviewed key executives and identified the additional
major strategic objectives for the client. This forum, combined with the
assessment and financial base case resulted in the formation of the offshore
strategy which included the type of model, ownership options and specific
approach for each of the 5 business units.
Value:
The proposed strategy was crafted with the limitations that our client had of
ensuring all 5 business unit needs were met as well as the current supplier
relationships were leveraged appropriately. One of the key benefits was the
ability to identify how to enhance the existing joint-venture relationship with
one of the companies to form a more strategic partnership.
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Discovery & Assessment
Process:
After the strategy was developed, a discovery and assessment visit was
conducted to India and the Philippines to validate the approach by visiting key
suppliers that possessed the necessary skill-sets and expertise in the
technology areas the client was considering for offshore. Nine suppliers were
visited covering both legacy and contemporary technology areas. The trip was
conducted over a 6-day period.
Value:
The client team, with neoIT's assistance, was able to validate the assumptions
and benefits of the chosen strategic direction as well as the timeline for
execution. The key benefit was the ability to make this decision in a short
time period without sacrificing the detailed knowledge that was needed.
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ResultsTogether, neoIT and the client
team developed an offshore strategy. As a result, our client has made the joint
venture a majority ownership and decided to leverage the existing offshore
supplier contracts rather than pursue new relationships. Our client has created
strategic partnerships with two of the previous five offshore suppliers. Over
time they will leverage these three entities to manage their global application
support and maintenance. A second phase of the strategy includes adding an
additional location in a new global market. These choices have allowed our
client to save 15% of their overall budget for application maintenance and
development.
In addition to these exceptional achievements, this approach for the first time
aligned all business units across the client with a common approach, a common
business plan and a common framework on how to leverage offshoring across all 5
business units. |
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AMP
AXA
Bell South
Cardinal Health
Cendant
Chevron
Citigroup
D.B. Zwirn
DuPont
FTVentures
Gateway
Hartford Life
HCA
Hewitt Associates
JPMorgan Chase
Liberata
Menlo Worldwide
Mercury
Nomura
PPM Capital
Pyxis
Siemens
Sony Pictures
Sprint
Stanford University
Towers Perrin
Trustmark Insurance
TXU
Verisign
Visa
Warner Brothers
Wells Fargo Foothill
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For more information about
how your company can benefit from working with neoIT, please contact us. |
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