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6prog consultants | Procurement Case Studies by Ricky Wallis

1: Macquarie

National Grid Transco (NGT) sold off 4 of their 8 regional gas networks, and Macquarie Bank, backed with a consortium of Investors, successful led a bid for the Wales and West regional network. This was a £1.7B acquisition, and was Macquarie’s largest, and most high profile acquisition in Europe. This regional network supplies gas to some 3M people in Wales, and the West of England, and a new Company was formed on 1st June 2005 called Wales and West Utilities Limited (WWU) to provide this service. Macquarie Bank still has equity to the tune of 30% in WWU. One of the many services which NGT will be providing to the owners of the sold off networks, until June 2006, in the Front Office facility. In my role as Business Lead for the Vendor Management stream, on the Front Office project, I was solely responsible for the negotiation, and finalising of all the Commercial contractual arrangements for the Front Office Infrastructure, which WWU were building, to replace the current service being provided by NGT. The time scales for this project are very tight with a clear unmovable end date of June 2006, as this is when the current service being provided by NGT finishes. I led, and successfully completed large-scale negotiations for Software, and associated services for specialist Utility software applications, data migration and systems integration with one of the I4 Companies, and resource/software with a leading ERP Company, realising savings of £2M and ensuring that adequate Commercial frameworks were put in place.

2:BP

During my assignment at BP I worked in the newly formed GS&Q (Global Sourcing & Quality) Department, this was formed to manage BP’s recently centralised annual spend of $1.5B on IT. I oversaw complex, business critical IT Projects worth 10’s of Millions of dollars. One of these projects included managing the RFP process to cover the outsource of support for 900 applications within BP’s 4 distinct business streams, across UK, Europe, and the US. This outsource was valued at $10M per annum, and the short listed Bidders included the incumbent IBM, Infosys, Wipro, and a consortium of SAIC, and Satyam. I also managed the full commercial tender process to cover hosting support for 1900 servers, the scope of which included the full UK desktop environment, and servers to be migrated to BP’s European Mega Data Centre (EMDC). The EMDC is BP’s facility in the Docklands, which is due to house 5000 servers by the end of this year, backed up with a DR facility located in Hounslow. I also took the Procurement lead on 2 other projects for the EMDC, these being the migration of 350 servers to that location, and the rental of 2 tape libraries. Across these 4 projects savings of $8M were identified, and the rental agreement negotiated also included a $1M offset arrangement.

3: QinetiQ

Whilst at QinetiQ, who are Europe’s largest Research organisation, I held the post of IT Category Manager. During this 2-year assignment I played a major role in scoping, and defining the strategy for hardware, and software to meet the needs of a 10,000 user community. Working with divisional MD’s, and key stakeholders to ensure that Suppliers were selected who could meet QinetiQ’s criteria in terms of service provision, pricing, and quality. I developed metrics, to monitor price, service delivery, and quality. These included benchmarking, and implementing KPI’s, with financial penalties, to cover phone answering, quote turnaround, delivery lead-times, and quality. Historic spend was reviewed to enable a greater understanding of past trends in IT, and I worked with key stakeholders within QinetiQ’s IT community to be able to gain an insight into the future of their IT landscape. I delivered significant savings, in the region of £1.5M, in key areas that included networking equipment, Microsoft software, specialist software, and mobile phones. Other areas of my remit included: Gaining market intelligence of the IT Industry through networking with staff at previous Companies, and colleagues, reading IT publications, and attending exhibitions, understanding the capability of all the major OEM’s, and Re-Sellers, and where their service model would be appropriate for QinetiQ. I also kept abreast, and was aware of emerging technology, working with QinetiQ’s CIO to keep him up to date with developments in this area, and running trials with new products, in particular mobile connectivity.

4: Virgin Atlantic Airlines

I worked at Virgin Atlantic Airlines, based in Crawley, as an IT and Telecomms Procurement Manager. Virgin Atlantic Airlines were founded by Richard Branson in 1984, and are a major player in the Global Airline Industry, with a £1.5B turnover, and flights to 32 destinations worldwide. Key deliverables within my remit include running the full tender process from pre-qualification, through to contract award, for the provision of a support and maintenance service for all of Virgin Atlantic’s server estate, which totals 600. I was the Commercial lead on a major savings initiative to drive out £1M of costs from our £5M spend with our Key Datacomms Supplier, and I also concluded negotiations, and contract sign off for a £2.5M Electronic Flight Bag software and hardware agreement with Lufthansa Systems GmbH.

5: Marks and Spencer

Marks and Spencer are a leading high street Retailer. Marks and Spencer had seen a significant upturn in business which has resulted in a large scale investment in IT. During my assignment I was the Commercial Manager for the £52M Infrastructure and Point Of Sale (I-POS) programme, which is one of the largest IT Retail programmes in Europe, to replace Marks and Spencer’s current Stores infrastructure covering some 20,000 tills. Key tasks included the negotiation of the software, and associated services for all the till estate, the provision of other hardware, and software requirements, including the identification of savings in excess of £1M.

6: RSPCA

I was the Commercial lead, at the RSPCA, on the £7M Salesforce programme’s covering SRM [CRM] and Wilberforce with SI’s Deloitte and Make Positive. Responsibilities included negotiating CR’s, and any changes/ amendments to existing contract’s and negotiating any new contracts on the programme. I worked closely with the SI’s, Supplier’s, the programme manager, programme team, and legal, to ensure that the RSPCA could enjoy the most favourable terms.

Ricky and I noted the applicable core skills in procurement can be applied cross-industry.