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Hitachi Energy: managing a million-dollar vendor landscape

We’ve partnered with Hitachi Energy over the past 3 years, working together on several critical initiatives during this time. From strategic topics, like helping define the operating model, through to operational delivery, such as building the team, defining, and running the operational processes, we’ve supported our client in building out new capabilities across the organisation.

  • Outcome 1: Built and delivered an operating model within 7 weeks
  • Outcome 2: Ran a proof of concept with a selected IT vendor and incorporated key learnings for launch

The Challenge

When divested from ABB, Hitachi Energy made the decision to select an external partner to assist with building up the new IT environment (read more here).

Following our support on a strategic sourcing process to identify a new IT Infrastructure services partner, Hitachi Energy needed to establish an operational vendor management (OVM) function. This would manage future operational elements of the outsourcing relationship. Certain capabilities are required to enable key operational vendor management processes – like invoicing, consumption monitoring, and obligation tracking – to run seamlessly, and that’s where our team came in to support our client.

The Approach

In order to establish an operational vendor management (OVM) capability, we first started defining the scope of activities. In this context, an OVM capability is a control function responsible for the management, onboarding and offboarding of vendors including all related processes.

To help achieve this for Hitachi Energy and reach the desired outcomes, we supported across the following areas:

Defining the scope of OVM

  • The goals, direction, and outcomes required from this team

Defining the operating model

  • Operational vendor management capabilities defined, high level processes drafted and clear responsibility matrix agreed between stakeholders groups (e.g. finance / IT / sourcing)

Developing an invoice processing approach and associated processes

  • Taking the written processes and executing these to iterate and improve

Supported with hiring team, onboarding and handover of capability

  • Rapid support with training new team to run the OVM capability

The Impact

Over a 7-week period, we worked collaboratively with the head of infrastructure delivery to rapidly build the direction, operating model and underlying processes required to power this new team. We ran a proof of concept (PoC) of the initial consumption reporting, invoice management and governance processes with the vendor ahead of the first billable month, and incorporated learnings from the PoC, meaning the team were set up for success from day 1 of the deal going “live”.

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Rory Farquharson

Rory Farquharson