Benchmarking IT-Service Providers for Chinese Automotive OEM

The client, a Chinese automotive OEM (original equipment manufacturer), had an external IT and Telecommunications provider managing their IT databases as well as managing their Enterprise Resource Planning (ERP) system.

The client had been working with its provider for over a decade but started to feel unsure whether they had a great deal or not. Due to uncertainty on their current price level, the client turned to ARC Consulting asking for a benchmark study of the current IT and Telecommunication providers on the market which could offer Database and ERP-system management, assessing the possibility of reducing the cost.

IT Equipment

The project was split into two parts. Firstly, the project started off by a joint workshop between ARC Consulting as well as the client’s personnel to establish the scope of the benchmarked services as well as the client’s requirements.

Secondly, based on set prerequisite and requirements, a thorough benchmark analysis was conducted, resulting in a comprehensive report which gave the client an overview to all possible providers in the client’s region. ARC Consulting conducted RFI:s and RFQ:s with all providers to receive first-hand insights and accurate information from the providers. The report concluded a total of nine potential IT-service providers, suitable and capable of handling the client’s high requirements. Those nine made it to the final list and was included in the final cost benchmarking.

The final report included company profiles of all potential suppliers, based on both data-analysis as well as on-site visits and meetings. The report also contained a benchmark comparison between the alternatives, highlighting strengths and weaknesses of them all. Some of the further visits to the potential suppliers by the client were accompanied by ARC Consulting to provide external support during the visit.

Based on ARC Consulting’s recommendations, the client decided to conduct further supplier visits and meeting, so

Thanks to ARC Consulting’s report and accurate insights, the client could utilize on the information and managed to re-negotiate their contract with the current supplier.

This resulted in a successful cost cut by almost 9%, thus exceeding the lowest benchmarked price and therefore obtaining market leading price. By doing this, the client also avoided any costs of switching suppliers, making this the most successful outcome possible.

See more about our sourcing & supply chain management services and our experience in the automotive sector.

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