Excellence in IT Management and Digitalisation

IT Sourcing

Thanks to our broad knowledge of the market, combined with a procedure model that can be adapted flexibly, LEXTA can provide broad-based advice and assistance – from the sourcing strategy and accompanying RfP process to contract conclusion, and support for the transition. LEXTA’s portfolio covers the following areas:

  • Creation and validation of a sourcing strategy
  • RfP management and execution
  • Providing best practices in terms of templates, architecture and technologies
  • Creation of service agreements/specifications, SLAs and RfP documents
  • Service provider selection, supported by the LEXTA service provider database
  • Support for due diligence
  • Chairing and completion of contract negotiations
  • IT benchmarking for business cases and price indicators
  • IT sourcing strategy implementation
  • Setup of retained IT, plus provider and contract management
  • Transition support
  • Audits and testing (e.g. contract review and optimisation, IT security)

Benefits of IT sourcing with LEXTA

The support LEXTA gives its clients for the sourcing process follows the principle of ‘sourcing right’ rather than ‘sourcing out’. Accordingly, this means we do not simply follow a rigid strategy but instead constantly pursue the best solution that suits our clients’ individual and sector-specific situation.

Besides the necessary degree of flexibility, our experienced consultants contribute their extensive expertise and wide-ranging industry knowledge as well as key soft skills like authenticity, seniority, negotiating abilities and motivational acumen. Despite engaging in active dialogue with service providers and the market in general, LEXTA is an entirely independent company: we neither have partnerships with any service providers, nor any other dependencies that would influence our judgment as sourcing advisors.

Roger Sparks talks about the three simple steps for a successful project sourcingManaging Director, LEXTA UK

The LEXTA approach to sourcing

There’s no such thing as a ‘standard’ IT sourcing project: each project depends on the client, the sector and the situation. In general, however, sourcing projects can be split into five similar phases that can be combined to best suit your needs:

Strategic
review
Sourcing-
strategy
Provider
selection
Negotiation
Transition
1. Strategic review
  • Review of current service provision (requirements, use of services, costs, know-how)
  • Processes
  • Indicative benchmark
  • Analysis of market and competitor situation
  • Analysis of needs and capacities

In the first phase of the LEXTA procedure, we primarily focus on assessing the current situation. Often, we use an indicative benchmark to assess current service provision in the context of current costs and compare these to the market. A comparison of services purchased with those that are actually needed also forms an essential and central part of this ‘stocktaking’ operation.

In this phase, LEXTA primarily offers support in the form of templates, know-how and experience, and assists in structuring the procedure. The indicative benchmark is naturally also part of LEXTA’s product portfolio.

Result: an extensive and coordinated as-is assessment
2. Sourcing strategy
  • Specification of sourcing goals
  • Creation of an IT service catalogue
  • Orientation on core business
  • Bundling of IT services
  • Steering of individual units
  • Derivation of sourcing scenarios
  • Economic feasibility analysis/business case
  • SWOT analysis
  • RfP strategy

Once the status quo has been analysed, this is followed by defining the target state or, to be more specific: the definition of the sourcing goals. When defining targets, we work in close consultation with our client to develop an IT service catalogue and bundle IT services; frequently, this results in a much stronger focus on the client’s core competencies.
Business cases are set up and SWOT analyses carried out for the various possible sourcing scenarios.

As a last step, decision documents are used to select and agree on the final sourcing strategy.

In this phase of the project, LEXTA deploys standardised process models to ensure the workflow is both structured and efficient. Likewise, LEXTA is also able to calculate business cases or develop a variety of alternative approaches.

Result: a jointly agreed sourcing strategy
3. Provider selection
  • Evaluation of market options
  • Review of internal sourcing resources and competencies for steering providers
  • Definition of SLAs and service specifications
  • Request for Information (RfI)
  • Competitive dialogue
  • Long list
  • Request for Proposal (RfP)
  • Short list
  • Exploratory talks
  • Analysis of references

The third phase includes the actual invitation to tender. This phase begins with the preparation of the relevant tender documents, including service specifications, master agreements, SLAs and the necessary supporting documents (e.g. information security requirements for suppliers). Reviews of internal resources for provider steering also forms part of this phase.

Once the tender document has been prepared, a selected long list of providers can be invited to respond to an RfI (Request for Information). This selection is based on the LEXTA service provider database, which is used to hold many important sets of key data on contact persons, service portfolios and locations, as well as estimates from previous sourcing projects. This ensures that only suitable providers are considered in the process from the outset. A ‘competitive dialogue’ procedure and mutual challenges are used to cull any unsuitable providers. The remaining providers receive the RfP (Request for Proposal). These providers are asked to submit a fully priced and comparable quotation. Pitches, exploratory talks and comparisons of quotations are used to shorten the list of potential providers until only two or three bid submissions qualify for the short list.

Thanks to its broad knowledge of the market, LEXTA offers extensive expertise for provider selection. Preparation of the tender documents is also simplified and accelerated by our field-tested sets of templates.

Result: evaluated quotations
4. Negotiation
  • Development of contract structure and pricing model
  • Ad hoc benchmarks
  • Drafting of master agreement
  • Due diligence
  • Conducting negotiations
  • Letter of Intent (LoI)
  • or
  • Negotiation of internal service agreements

The next phase in the project involves contract negotiations with the remaining providers. Aspects such as due diligence, LoIs (Letters of Intent) and various ad hoc benchmarks all form part of these negotiations. Contract documents are also finalised in agreement with the service providers.

LEXTA can provide support from seasoned negotiators during these negotiations and can, if necessary, conduct the negotiations on your behalf.

Result: negotiated quotations/contract conclusion or internal service agreements
5. Transition
  • Assistance for transfer of business
  • Support for migration and transformation processes
  • Transfer of applications/services
  • Steering of knowledge transfer
  • Partner accounting and setup of retained organisation
  • Rollout of KPI-based monitoring and reporting processes
  • Introduction of asset/licence/contract/service level management

The last phase is transition. In this phase, service content starts to be transferred to the chosen IT service provider. This transition covers the migration of applications and services – roughly speaking the entire transfer of business. Major factors for a successful transition include, above all, the steering of knowledge transfer, the development of client competencies and professional support for the migration and transformation processes.

Result: Transfer of service content to IT provider/establishment of client competencies

We are also happy to offer workshops where we work together to identify the options and potential for your business in relation to IT sourcing.