Case Study
Managed services helped global manufacturer reduce TCO by 95% and improve productivity by 36%
CLIENT
Founded over a century ago, this multinational company is one of the leading automotive parts suppliers for light and commercial vehicles. With nearly 50,000 employees, the company generates several billion dollars annually.
CHALLENGE
Complex application landscape led to single-point-of-failure risks and high cost of ownership
The company needed help managing its expansive application footprint of more than 500 systems, including Infor XA (formerly Mapics), Kronos, AS/400 Infinium, business planning and controls, engineering product lifecycle management, etc. The systems spanned four continents and at least five business units. Although more than 100 full-time employees managed the applications, the lack of an SLA framework or standardized processes across business divisions caused confusion that slowed response times. The existing support team also relied heavily on a few critical resources that created risks for single points of failure. All of these issues contributed to a high cost of ownership and difficulty changing technology directions.
TRANSFORMATION
A thorough, transparent transition to managed services helped reduce risks and costs
After a methodical four-week assessment to understand the company’s application portfolio, challenges, and needs, a UST project team created a detailed transition roadmap and ongoing governance plan that included:
- A “safety net” transition approach—In this highly collaborative, transparent model, the project team implemented a detailed communication plan coupled with a visual dashboard and reports to keep company stakeholders aware of progress according to the transition schedule and success metrics.
- Knowledge transfer—The project team created a services reference library that codified, standardized, and documented all processes and a “client university” repository to house all knowledge artifacts.
- A phased transition—Senior UST personnel assumed management for critical, high-risk applications while the rest of the application footprint migrated to UST’s standard service delivery model. Each phase took about 90 days and was further broken down into discreet transition projects based on similar technologies and resource availability.
- Consolidating and modernizing legacy systems—The UST team consolidated AS/400 servers across geographies; modernized the HVTSS mainframe system; tuned the MS/8 mainframe to reduce millions of instructions per second (MIPS); and consolidated electronic data Interchange (EDI) across systems.
- Optimized service delivery—By focusing on root-cause analysis, incident volumes decreased while application availability improved, and by analyzing incident trends, the UST team optimized application performance.
- Standardized regulatory and security processes—The project team ensured all applications adhered to the Sarbanes-Oxley Act (SOX) and International Traffic in Arms Regulations (ITAR).
- Best practice staffing—With highly controlled on-boarding and off-boarding processes, all resources were cross-trained in multiple technologies with specialized staff for niche technologies.
- A gain-sharing pricing approach—By incentivizing employees with a stake in the project’s success, personnel were motivated to perform at their highest level while the company enjoyed a predictable cost structure.
- A 5-year SLA framework—Using this outcomes-based delivery model, the UST project team monitored support performance against baseline SLAs and reviewed service levels every 12 months. To facilitate continuous improvement, the team reset the minimum service level (MSL) to the average of the four highest actual monthly results.
IMPACT
Continuous improvement of application footprint reduced TCO and improved support resolution by 95%
With the managed services program in place, the global auto parts manufacturer gained peace of mind that its applications are monitored and optimized for continuous improvement. The company has realized these benefits to date:
- Lower total cost of ownership (TCO)—thanks to the gain-sharing plan and controlled investments in legacy systems.
- An expected productivity improvement of 36%—by year five of the SLA plan.
- Accelerated support response times—with an MSL of 97% for business-critical applications and 75% for all other systems.
- Faster issues resolution time—business-critical applications saw a 95% MSL, and all other systems saw a 75% improvement.
- Increased customer satisfaction—rated at four out of five MSL.
RESOURCES
https://www.ust.com/en/what-we-do/strategy-implementation-operations