IT Transformation – Manufacturing/Marketing Company

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Situation

• New owners analyzed SG&A and found it too high – especially in Information Technology
• IT was badly disconnected from business leaders – not working on things that business considers important
• Application Development consistently delivered late, lacked functionality and often failed implementations
• Large “Shadow IT” organization built up to compensate for central IT failures
• IT operations performing poorly on critical applications
• Lack of IT synergies in purchasing

Actions Taken

• Assessed organization and reduced expenses to be in-line with benchmarks
• Instituted IT governance process that ensured engagement and alignment with the business
• Reorganized into State-of-the-art Agile Development teams and reduced redundant headcount
• Re-engineered remote support processes and swept the Shadow IT into the central IT organization. Organization size reduced to fit new volume of work
• Quickly stabilized operations and put in place required procedures and metrics to manage it
• Negotiated new supplier agreements encompassing all operating units

Results

• Actions Taken have reduced annual IT expense by 25% or $6M on $24M spend
• Business Leaders direct the work and the funding. IT work is realigned to conform with business priorities
• Within two months, reduced delivery time by 75%, improved software quality, improved total output by 50% and reduced development staff by 20%
• Reduced Shadow IT group by 40 people and centralized support. Reduced overall support costs by $4M
• Preserved Fall selling season of $350M by aggressively managing failing application, insuring company wide bonus payout.
• Reduced PC and Server spend by 25% or $1M across all operating units