IT Cost Reduction Case Study | AlixPartners

IT Cost Reduction – Global Manufacturing

Situation

Company operated as multiple international business units that were company specific
Significant industry changes forced company to restructure
IT organization consolidated global IT operations and standardized key systems
Continuing deterioration required additional IT cost reductions of 30%
IT had identified approximately $70M in potential additional reductions
Continuous cost reduction efforts had exhausted the IT organizations ability to respond and little progress was being made.
AlixPartners was engaged to identify additional $40M of cost reduction and accelerate realization of savings

Actions Taken

Conducted four week QuickStrikeSM review to analyze all IT spending categories
Developed negotiation strategies for service suppliers and software vendors
Restructured the IT organization to increase focus on cost reduction initiatives and establish accountability
Detailed cost drivers in each area of IT by consumption, unit costs and service levels
Identified new structural opportunities to change how IT services are delivered
Established a Minimum Run Rate model to evaluate incremental and discretionary spend requests

Results

Identified over $50M in additional cost reductions
Detailed plans and sequencing for 40 initiatives across IT landscape:
- Application Support
- Project Demand
- Hosting
- Communications
- End User Computing
Balanced risk/reward of cost reductions and service level implications across opportunities
Restructured the IT organization, reducing staff by 30% and creating dedicated cost containment team
Defined execution and operational risks across functional areas
Refocused service delivery team to manage increased operational risks

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Reduced Trade Working Capital by $800Million-GLO Reduced Trade Working Capital by $800 Million

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On Track To Reduce Accounts Receivable 20% On Track To Reduce Trade Working Capital by €250 Rapid Cost Reduction—Consumer Products Sustained Transportation Cost Reduction Comprehensive SG&A Cost Reduction Program

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