IT Sourcing Advisory

About IT-sourcing | The contract lifecycle | Our approach and methodology I Insights about IT-sourcing

Danish companies choose to outsource their IT services for many different reasons, but a common feature is that it is no longer just about minimising the cost of IT operations. Instead, for many Danish companies, it has become a crucial success criterion that the supplier contributes to ensuring higher quality and end-user satisfaction, provides strategic sparring and advice and is able to ensure greater access to specialist skills to ensure increased flexibility for the client. 

The market for IT services has thus shifted to a scenario where clients want to avoid any kind of supplier lock-in and gathering of all their IT services in one basket with one supplier. Instead, clients want greater flexibility and more options to continuously adapt and replace their IT services; a trend known as selective outsourcing. Selective outsourcing has led to higher demands on clients' ability to manage contracts and suppliers effectively, as they now have to manage multiple suppliers and multiple IT services at once.

KPMG's advisory services include all essential parts of a contract's lifecycle from the strategy phase to tender to transition assistance as well as services related to post-signature contract and vendor management and the contract termination phase.

Each phase contains its own unique challenges. In the strategy phase, we typically advise on setting the scope, narrowing down the market and establishing dialogues with potential vendors. We also help with building the business case and overall design of the tender phase.

In the tender phase, we typically take on the task of managing the tender process all the way through to the signature of the contract. We also assist with the preparation of the contract. We typically collaborate with the client's preferred legal adviser on the preparation and finalisation of the entire contract structure, where we handle the task of preparing the technical and commercial attachments. 

We provide advisory services to both public and private clients and thus have a wide array of pre-made delivery methods and template packages that work in both a private context and in a public context where public procurement law applies.

Our advisory services are based upon KPMG's method and framework tool, which is continuously updated with best practice from all around the world. You are thus guaranteed advisory services that have already been tested on the market. Along with that, we always ensure that our advisory services are tailored to suit your specific situation and needs.

We call our method and framework tool the "Value Delivery Framework", and it consists of six overall phases, which ensure a firm and tightly controlled process throughout the entire contract life cycle.

We provide advisory services within all phases based upon our Value Delivery Framework:

• Strategy: The purpose of the strategy phase is to determine the overall goals and guiding principles for IT sourcing that lay the foundation for the project. This is necessary in order to subsequently ensure the best future service delivery model. To ensure the best start, we recommend an initial analysis and assessment of your current IT organisation and service delivery model.

• High-level Design: The initial design phase deals with the choice of defining the best sourcing delivery model, which we define based upon several different sourcing scenarios and the associated business cases. The initial design phase must ensure that there is a sufficiently detailed foundation and incentive to initiate a potential sourcing process.

• Detailed Design: The detailed design phase builds upon and goes in depth with the deliverables from the strategy phase and the initial high-level design phase. As part of the detailed design phase, the tender strategy must be defined, the supplier shortlist identified, and the tender documents prepared and ready to be published.

• Build: The build phase builds on the detailed design phase and includes an evaluation of the suppliers' proposals. After the evaluation, there will typically be a negotiation phase and a down-selection of the few final suppliers. We ensure all the necessary facilitation during this (often) hectic phase and assist in the finalisation and fine-tuning of all contractual documents.

• Implement: The implementation phase includes the subsequent transition phase from the incumbent supplier to the new supplier. This phase can often last a long time and typically entails major changes in the day-to-day life for all the end users. We ensure the necessary planning as well as contract, vendor and risk management to ensure a successful completion of the entire project and the commencement of the new contract and solution.

• Improve: The final improvement phase is also often the beginning of a new project phase. This phase must ensure that the originally planned profit realisation is also realised in the day-to-day operations. Sometimes the expected value is not achieved because the processes are unclear, the collaboration has come to a standstill, budget overruns, or there is a lack of incentives from both parties to solve the challenges ahead. We offer advisory services and assistance in solving these problems for you, based on a commercial and business solution-oriented approach that works well for both parties.

KPMG in Denmark is part of the global KPMG network, operating in 143 countries with more than 265,000 employees worldwide. We are used to working across national borders and often exchange valuable experience and best practice with each other. If you would like to learn more about areas related to our IT Sourcing Advisory team, we recommend that you take a closer look at the following articles from our international colleagues: