A very large healthcare payer organization began negotiations to outsource deskside services for all of their 37,000 employees to a global IT services company. The Client had already outsourced 25% of the deskside services to this vendor resulting in a $7 million annual savings. However, with even more budget cuts looming, they needed to find more ways to save.
Identify savings opportunities and ensure favorable terms for deskside services for over 37,000 users
Seprio was called into review the initial proposal. While the proposal would result in savings, Seprio suggested that the Client also ask the vendor to bid on help desk outsourcing since costs can be better controlled when one organization manages both services. The new bundled proposal was reviewed, analyzed for internal rate of return (IRR), and benchmarked against what others were paying in the industry. The sourcing team decided the pricing was favorable and competitive given the scope of the work and spent a week in negotiations nailing down the details.
As a result of this sourcing project, the following benefits were achieved:
- Additional savings of $20.6MM over 5 years on top of the $7MM annual savings generated in the first SOW that moved a portion of the deskside services. The total 5-year savings for this project was $55.6MM.
- A cost per call and per machine decline year-over-year to recognize implementation of “best practice” methods, policies and procedures over the life of the agreement.
- Negotiated pricing to compensate for both upward and downward changes in call volume and number of machines supported.
- The vendor is contractually obligated to bring 4 transformational initiatives annually to help continually decrease cost and increase the value of the service to the Client.