News & Research: Client Successes

Case Study: Retail IT Outsourcing Contract Negotiation

ScottMadden assisted a large, athletic equipment retailer with it's IT outsourcing contract negotiations.

• The company wanted to integrate its IT infrastructure and management worldwide
• The company was having difficulties staffing the IT group to meet the changing environment of business to consumer commerce and Web development
• The company had recently acquired two to three mid-sized international companies that also required integration

• Analyzed the IT cost structure and estimated the annual IT function cost to create a baseline reference
• Delineated cost implications of IT outsourcing
• Examined the IT budget, expenditures, and forecasts
• Determined costs for operational and discretionary projects

• The client was able to identify areas of exposure and concern, and began to establish a negotiating position
• The new contract negotiation strategy resulted in a 25% reduction in pricing compared to initial proposal
• The client better understood issues relating to budgeting and actual expenditures, typical budgets as compared to revenues, and typical outsourcing margins