Hitachi Energy: accelerating a global sourcing initiative

29 June 2021 — 1 min read

Energy

Power & Utilities

Sourcing & Commercial Office

Accelerating a global sourcing initiative to enable a successful exit from Transition Service Agreements (TSAs), and to build a sustainable next-generation IT service for an organisation with over 35k employees.

Context

Hitachi Energy was looking to outsource its IT infrastructure (including Network Services, on-premise, and cloud infrastructure services), end user computing (including Device as a Service, application packaging, monitoring and management) and service management (including service desk, onsite support, SIAM partner) environment. This was part of a strategy to build sustainable next-generation IT services. The previous sourcing advisor’s approach was not meeting the expectations of the senior management, and as a result, our team was engaged. Led by our unique sourcing methodology, we stepped in to create a faster, more collaborative process.

Why Elixirr?

We established ourselves as a specialist sourcing advisor in 2009, before growing into an AIM listed multidisciplinary management consultancy
Our award-winning Collaborative Solutioning approach has delivered more effective outcomes for our clients and within shorter timelines compared to traditional RFP approaches
We have extensive experience designing and delivering large scale technology transformations, often from inception
We recently won the Global Sourcing Association’s Advisory Firm of the Year and Financial Services Project of the Year
The guidance we provide as part of our Collaborative Solutioning approach is independent of vendors, software publishers and service providers; our focus is on identifying the best fit solution available for our clients in the market
Our sourcing team has valuable experience and insights from the buy, sell, advisory and legal sides of a deal

01 Overview

Hitachi Energy was looking to outsource its IT infrastructure, end user computing and service management environment as part of a strategy to build sustainable next-generation IT services. The existing sourcing advisor’s traditional RFP (request for proposal) based approach was not meeting senior management expectations. Led by our unique sourcing methodology, we stepped in to create a faster, more collaborative, iterative and solution-focused process.

02 Outcome

Enabled Hitachi Energy to rapidly select the best vendor to deliver their next-generation IT services vision

03 Method

Collaborative Solutioning

The challenge

Hitachi Energy were on a journey to become technologically independent. Their existing IT services were being provided under Transition Service Agreements (TSAs). This meant that any delay to identifying a new IT partner would impact the business operationally and commercially. The approach of our client’s previous sourcing advisor was RFP-based and therefore very traditional. This failed to reach the expectations of senior management. Our team were engaged to accelerate our client’s journey to IT independence through a more collaborative and solution-focused process. How did we do it? Coordinating and designing a collaborative sourcing process of evaluating, selecting and contracting an IT infrastructure partner, involving over 50 stakeholders across the business.

Collaborative Solutioning

Key to this was our unique Collaborative Solutioning methodology, a highly iterative and solution focused vendor selection process. Traditional RFP processes are typically slow moving, inward looking and provide little opportunity for feedback and market insights to guide the development of the solution. Collaborative Solutioning enables you to engage vendors early and collaboratively develop solutions through an iterative process. This process builds a strong partnership foundation, rather than the typical supplier / Customer mentality.

The approach

Our team partnered with senior management and our client’s strategic sourcing and IT infrastructure internal teams to accelerate the sourcing process. This included:

Using our unique Collaborative Solutioning sourcing methodology to identify the best IT infrastructure services provider to partner with Hitachi Energy and help them achieve their strategic vision
Supporting the establishment of a next-generation IT operating model; this included leveraging market leading technologies to ensure optimum flexibility both commercially and operationally
Establishing robust governance and reporting framework to enable a clear view of status and progress
Facilitating a series of workshops covering an overview of the solution, transition, transformation, security, commercials, and BAFO submission topics
Monitoring stakeholder feedback and analysing public sentiment, leveraging this insight to help evaluate which supplier to move forward with
Facilitating a structured and auditable evaluation process receiving input from all involved stakeholders
Leading and coordinating the contracting and negotiation of a multimillion-dollar deal spanning 60 countries, 35k users and 300 physical sites
Defining an outcome-based contract, and designing a consumption (price by quantity) based commercial model
Coordinating with legal stakeholders and product group owners to develop and finalise 60+ contract schedules, including service, governance, legal, transition and commercial documents
Providing advisory experience and support to our client throughout the project, setting up the post-signature transition process as they negotiated the deal with consideration for the retained organisation design

The value delivered

We enabled our client to meet their strategic objective of sourcing a strategic IT infrastructure provider through a robust, iterative and solution-driven process. This enabled our client to sign a 7-year full-stack infrastructure services contract, with a multimillion USD yearly run rate, in just 6 months.

Following the successful divestment from ABB, we had to rapidly identify a strategic partner to support us with our Global IT Infrastructure Services. Our incumbent sourcing advisor’s traditional approach was failing to reach our expectations, so Elixirr were engaged to provide an alternative process. With their support, we were able to accelerate our sourcing journey to enable us to achieve our business outcomes. The Collaborative Solutioning approach enabled us to all engage directly with the suppliers who participated in the process, and better understand the proposed solution and the cultural fit. The approach was commended highly by senior leadership and is being considered as the go-to methodology for future strategic sourcing activities.

Sarah Strien – Strategic Alliances Manager, Hitachi Energy