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Global Agribusiness, IT Contract Cost Savings

Peru’s Commitment

This global agribusiness client, a world leader in crop protection and plant biotechnology, spends tens of millions of pounds every year on a host of IT and telephony services from a range of service providers.

Despite being a sophisticated buyer of digital services, it recognised that its oversight of existing contracts and associated regular invoicing was an area requiring attention. In particular, it considered that its network services contract with one of the world’s leading providers was an area of focus that could reveal opportunities for reducing its annual spend.

It turned to Peru Consulting for an independent view on whether or not it was:

  • Receiving all the network services that were specified in the contract,
  • Paying the right amount for them,

And looked to us for advice on the remediation of any issues that came to light.

The Substance

Due to the complexity and coverage of the contract our approach needed to be highly structured and evidence-based. Our conclusions therefore were based on a rational and transparent assessment of facts, on which both client and provider could agree. To that effect the following activities were undertaken:

  • A comprehensive review of the contract and the technical services that it was specified to deliver, with a particular emphasis on the cost profile for the services over its multi-year lifetime, discounts, credits and baseline consumption profiles
  • An assessment of the key enabling services such as governance, capacity management and change management
  • A complete review of the assets utilised to deliver the operational services, composed of network circuitry and switches, telephone handsets and other specialised items such as videoconferencing equipment
  • An understanding of key processes such as commissioning new or improved services and decommissioning services and devices when requested

A confirmation of key logistical information such as the:

  • site locations, numbers and categorisation / prioritisation for network services provision
  • headcount of people consuming the services

Based on understanding the elements above we were able to critically evaluate the supplier’s quarterly invoices and supporting documents and advise our client on the accuracy of the match between bills and ‘reality on the ground’.

The Outcomes

Our work reached three overarching conclusions:

  • There was significant historical overcharging for telephony and network devices and their associated management charges. This resulted both in an operational charge adjustment for future years of many hundreds of thousands of pounds and an opportunity for the client to seek retrospective credits
  • The governance structure that was meant to oversee and correct areas such as capacity management was not functioning effectively
  • Process improvement was required in the areas of commissioning and decommissioning assets and services, and adjusting for these cost changes in the invoice.


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