AXXCON Cost Optimization

Energy sector – Interim CIO

Task:

Until a new CIO was identified, a regional public utility (gas, water, sewage, disposal of waste) needed a suitable solution: An Interim Manager as CIO. AXXCON was the preferred choice due to the proven expertise in terms of management experience, IT and supply industry. Besides the usual routine activities of a CIO there were some very specific tasks to be managed: A new ERP system already put into production without having passed acceptance, the IT budget had to be reduced by 15% and the suppliers of IT services contractually recommitted.

 

Challenge:

Due to changing ownership of the software manufacturer and the lack of experience with the acceptance of complex software solutions, a difficult situation had to be resolved. None of the parties involved were able to develop a structured and solution-orientated approach for mutual benefit. In addition, the software used by the client was excluded from the regular manufacturer’s maintenance (releases for functional expansions and hotfixes for error corrections) because of the missing acceptance. Required customizations extended the software continually, while the standard warranty could not take effect. The budget for IT services was defined across the board and it had to be lowered. It was also not controllable, because of numerous ad-hoc projects triggered by the daily business had to be performed.

 

Approach/Procedure:

AXXCON structured the overall IT expenses to get to a reliable budget, which also allowed medium-term planning. In addition AXXCON organized the outstanding activities for the approval and involved, besides the IT departments, the affected departments. The identified work packages were mapped to internal responsibilities and the processing was supported and coordinated by AXXCON. Defects that restrained the approval were eliminated in a process together with the manufacturer, for other defects adequate, economically reasonable solutions were provided (e.g. temporary work-arounds until the next release). Concurrently, AXXCON advised the client in relation to acquired claims, such as claims for compensation due to deficiencies in project implementation caused by the software manufacturer. With the support of AXXCON an appropriate acceptance procedure was introduced and implemented. All cost-cutting measures were recorded and in close cooperation with the employees of the client adjusted to the needs of the standard operation, as well as communicated transparently to all involved.

 

Result:

All cost-cutting measures were implemented within 8 months and resulted in approximately 25% cost savings. All suppliers were contractually recommitted with clearly defined SLAs. Since then a reliable medium-term based on the new model plan exists, a more efficient IT with adapted services and rated suppliers. The client was able to accept the software package, since all requirements from the specifications were finally implemented. The software maintenance and the operations support (e.g. for incident and problem management) are now equivalent to the standard procedure of the manufacturer.

 

Sustainability:

The client takes part in the development and is able to enforce corresponding contractual rights. Our Customer has become “the reference user” for the software package.

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