Insurance Company IT Outsourcing - Case Studies

ScottMadden assisted a large, international insurance firm in negotiating an IT outsourcing agreement.

The company's IT department needed to reduce costs and improve its operations
It had decided to sole-source its IT outsourcing including mainframe operations, helpdesk, networking, and desktop maintenance
After completing a major merger, however, the company was unsure of its data and baseline information and determined they were not prepared to negotiate with a seasoned vendor

Clarified the scope of IT outsourcing services to be provided and defined the current internal cost to provide these services
Developed a base case that documented assumptions and accurately defined costs that could be avoided
Developed comprehensive financial models that enabled the company to compare vendor prices and strengthened their negotiating power
Wrote technical contract schedules identifying service levels, penalties for not meeting those levels, and the method by which disputes would be addressed

Achieved much more favorable terms than those initially proposed by the vendor and a 40 percent reduction in pricing compared to the initial proposal

SM110