Supplier Performance and Cost

Using service analytics to drive better supplier management and IT decision making

Challenge

With a drive to reduce IT operating costs and improve service, our client was looking for an improved way to assess its annual IT spend, review supplier performance, and analyse the value delivered to the business. It has over 500 enterprise applications covered under an annual Application Management Service (AMS) contract with a global supplier, and wanted more information to help it get the best from suppliers.

It needed help to establish a mechanism to achieve greater insights into the AMS contract performance and identify opportunities to optimise its global landscape with a data-driven approach.

Mason Advisory was brought in to establish a service analytics function within the IT team, and to establish ways of assessing service performance (including root cause analysis), identifying opportunities for improvement, and establishing consistent service analytics practices that can be sustained as part of steady-state operations.

Solution

We worked closely with the client team on an iterative approach to service analytics, with cycles based on:

• assessment
• root cause analysis
• improvement planning.

Within the assessment cycle, the key inputs included external insight, IT service management (ITSM) data, supplier contracts, performance review data, master service agreements, total cost of ownership (TCO) baseline, and service level agreements (SLAs), to baseline the parameters and key performance indicators (KPIs) against which to assess service performance.

Some of the key metrics included cost per ITSM interaction per platform, service volumes and TCO analysis, incident reassignments, and resource efficiency and reassignment.

Targets identified through assessment were analysed in more detail following structured root cause analysis techniques. Deeper analysis was conducted to gain greater transparency on the drivers for cost and performance, and to correlate patterns across incident volumes, resolution times, resource profiles and cost.

In the improvement planning phase, outputs from the assessment and root cause analysis phases were used to identify improvement opportunities across the global application landscape.

Outcome

Through implementation of an improved service analytics function we helped our client to identify and drive service improvements including:

• identifying actions to address the root causes of poor service performance
• highlighting opportunities to extend or renegotiate service agreements and contracts
• identifying opportunities to improve data quality to enable more granular and accurate service analysis
• helping to shape service transformation initiatives.

The client will now have a standard set of measures to be sustained as part of the ongoing management and continuous improvement of the services and underlying contracts.