Moving from Cost Optimization to Value Realization Through Managed Governance Services
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Transcript of Moving from Cost Optimization to Value Realization Through Managed Governance Services
© 2017 Av asant LLC. All Rights Reserv ed.Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means,
including information storage and retriev al dev ices or systems, without prior written permission from Av asant LLC.
Tuesday, March 7, 2017
Moving from Cost Optimization to
Value Realization through
Managed Governance Services
Case Study:
Empowering Beyond
Summit 2017
2
JIM LEE
Director
Avasant MGS
Global Practice
Leader
ANTHONY CILLA
Associate Director
Avasant MGS Client
Delivery Manager
for Freddie Mac
#EmpoweringBeyond
@Jim_Lee_SC @Cilla_Anthony
Presenters
3
Agenda
About Freddie Mac
Drivers, Challenges, and Objectives
Managed Governance Services
Benefits and Results
4
About Freddie Mac
Federal Home Loan Mortgage
Corporation (Freddie Mac): a mortgage securitization firm
IT organization supporting business
areas through a diverse managed services ecosystem: mainframe; network and telecom; disaster
recovery; AD/M and testing
IT Managed Service (ITMS)
governance organization established to maximize value realization of managed services IT contracts
5
Drivers, Challenges, and Objectives
Enable ITMS
Tools and Automation
Value Realization
Capability, Maturity, Analytics
ITMS Mission: To be an industry leader in the use of managed services to help Freddie Mac excel in a future competitive market
6
Best practices, industry knowledge and insights, and tools to enable vendor value realization
Freddie Mac Managed Governance Services Solution
Role Based Dashboards
and Reporting
Workflow Processes
Contract, Performance,
Financial, and Risk
Management
Advanced Data Analytics
And Forecasting
Enabled CapabilitiesClient Vendor Management Capabilities
Managed Governance Services Delivery
ManagedGovernanceServices
Conduct Discovery & Planning
Establish ITMS Alignment
Implement MGS Environment
Launch MGS Services
Observe & Optimize MGS Service
Manage MGS Steady State Operations
Standard Modularized BestPractice Processes
Cont ract
M anagement
Financial
M anagement
Performance
M anagement
Relat ionship
M anagement
AvaSense™Op
timize
Co
nfig
ure
De
live
r
Continuous Improvement
7
Enabling Value Realization through Managed Governance Services
• Better demand forecasting• Testing Services
• Mainframe Services
• Performance and SLA
refinements
• Alignment with Outcomes
• Improved provider relationships
• Governance
• Deliverables & Obligations
Service Providers
• Risk management• Value leakage recovery
• Auditability
• Strategic partner to business
• Gap & risk analyses
• Demand management• Trusted advisor
• Operational Efficiencies• Metrics
• Process optimization
• Collaboration
ITMS
• Best practice processes and SME insights
• Innovation
• Continuous improvement
• Consistency, maturity
• Analytics
• Digital governance• Workflow
• Automation
• Library
MGS
Not only has Freddie Mac been able to realize greater value from their IT managed services
contracts, they have also been able to realize greater value from ITMS shared services as well
8
Benefits: Freddie Mac ITMS Governance Outcomes and Successes
~9%Typical industry
average cost of
Vendor
Governance
~4%Current Freddie
Mac ITMS cost of
Vendor
Governance
>$6MValue leakage
recovered since
inception of ITMS
5Key ITMS
processes aligned
with industry best
practice
processes and
automated
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Governance is best operationalized and orchestrated during contract implementation
Process and organizational change is not easy; contract management <> supplier governance
ITMS engaged as a strategic business partner in the sourcing process has saved $$$
Lessons Learned
ITMS is now the model for managed services governance across the enterprise
10
Managed Governance Services Outcomes and Results
Outcomes
• ~ $6M Value Leakage Recovered
• ITMS Strategic Enablement
• Transfer of risk; levers/SLAs
• Analytics Design & Implementation
• Value Leakage Management Analytics
• Performance Governance Analytics
• Demand & Consumption Analytics
• Service Delivery Refinements
• Updated Service Catalog
• Service Delivery Approach
• Resourcing
• Process & Tool Enhancements
Results
17 contracts with an aggregate annual
contract value of nearly $100M are now under
MGS at a total cost of governance of less than
4.5% of spend
Freddie Mac ITMS shared services organization
is positioned to expand enterprise-wide
Freddie Mac continues to realize the managed
services governance outcomes they expected
as well as significant added value from its
partnership with Avasant
“Avasant…identified significant savings opportunities through improved governance,
increased consistency of IT support for key business groups, and improved alignment with
managed services providers. Avasant has enabled Freddie Mac to focus its internal
resources on its core business and strategic direction” - John Borgelt, Sr. Director, ITMS
11
Current
▪ Providers
▪ IT outcomes (SLAs, KPIs)
▪ Cost optimization
▪ Compliance
▪ Reactive, ad Hoc, passive
▪ Risk mitigation
▪ Reporting
Future
▪ Strategic business partners
▪ Business outcomes ($$$, NPS, time)
▪ Value realization
▪ Enablement
▪ Proactive, disciplined, actionable
▪ Shared risk management
▪ Analytics
Value Realization is Driving Governance Transformation
Every step brings the vendor relationships closer to realizing its full potential value
© 2017 Av asant LLC. All Rights Reserv ed.Proprietary and Confidential. No part of this document may be reproduced in any form or by any electronic or mechanical means,
including information storage and retriev al dev ices or systems, without prior written permission from Av asant LLC.
Tuesday, March 7, 2017
Moving from Cost Optimization to
Value Realization through
Managed Governance Services
Case Study:
Empowering Beyond
Summit 2017