Sector: Defence & Facilities Management · Region: UK · Services: Shared Services Benchmarking, Outsourcing Advisory, Target Operating Model Design, Commercial Modelling
At a glance
- 40% reduction in IT running costs through a new outsourced model
- £20–25m savings identified over 5 years
- 5 shared service functions benchmarked: Finance, HR, Procurement, Fleet and IT
- 296-page master services agreement turned into a clear, testable set of requirements
The challenge
A UK defence facilities management provider, with £1bn in revenue and 1,500 employees, relied on a large outsourcing contract for its shared services. The agreement had grown complex and costly, and it was hard to tell whether the business was getting value for money. Leadership needed an independent, evidence-based view of what its shared services should cost and how they should be delivered, without putting critical defence operations at risk.
Our approach
- Benchmarking shared services. GOX benchmarked the cost and performance of Finance, HR, Procurement, Fleet and IT against the market, to show where the business was paying too much and where service fell short.
- Requirements from the contract. We distilled the 296-page master services agreement into clear, outcome-based requirements and used them to build a request for information (RFI) for the market.
- Market engagement. We worked with Tier 1 and Tier 2 business process outsourcing providers to obtain data-driven, benchmarked costs for each service, replacing assumptions with real market prices.
- Options appraisal. We built commercial models comparing a range of target operating models, from fully outsourced through hybrid to fully insourced. Each option was assessed on cost, risk and service quality, so the board could decide with confidence.
- Savings plan. We set out how to capture the savings through process improvement, system changes and bringing in a new delivery partner.
The results
- A new outsourced model that reduced IT running costs by 40%
- £20–25m of savings identified over five years across shared services
- Clear, market-tested evidence of what each service should cost
- A target operating model chosen on facts, balancing cost, control and service quality
- A simpler set of requirements the business can use to manage its partner and future renewals
Why GOX
GOX helps organisations get more value from the services they already buy. We combine independent benchmarking and sourcing expertise with practical delivery, so savings move from the spreadsheet into the P&L. Want to know what your shared services should cost? Book a Spend Diagnostic and get in touch.
