Overview
Aveas supported Jaguar Land Rover (JLR) over a five year period as they went through rapid and global growth.
This case study provides a summary of the sourcing work that we did for them over this period which included:
- An initial full outsource of all of their UK IT operations; we were asked also to lead Tata Motors through the journey in parallel
- Expanding the scope of IT sourcing to include JLR global sales offices
- Designing a service (and sourcing approach) for scalable project delivery (with an annual project spend in excess of £250m)
- Establishing a joint venture with Cherry International for production of cars (China)
- Leading the design and then sourcing for IT operations for green field factories in Europe and South America
Client Challenges
Jaguar Land Rover (JLR) was experiencing unprecedented demand for their vehicles and sought to expand both the vehicle range and widen their global reach. Demand was not just at all-time highs in Europe, but across North and South America and China. This demand was against the backdrop of aged technology estate which had been subject to years of under investment. In order to make a change step change, the CIO took the decision to initially outsource all of their IT services. Going from a position from only having an element of data centres outsourced to a total IT outsource model was a bold strategy, and one which Aveas helped to formulate and implement. As trusted advisors to the CIO, we played the leadership role across all of the sourcing initiatives and subsequent implementation.
What did Aveas do?
Specifically for sourcing…
Service Design
Aveas were responsible for the to be service design across all of the sourcing initiatives as precursors to any sourcing activity. This included designing the operating models, developing the initial business case, performing a change impact assessment and driving the underlying requirements.
Sourcing Strategy
Aveas developed the sourcing strategy and developed the initial business cases for all of the IT sourcing engagements. We were the only go IT organisation for IT sourcing.
Market Engagement (sourcing lifecycle)
Aveas led the market engagement activities from evaluation of the supplier market, through the development of the RFP, supplier evaluation and selection and later BAFO. All IT service descriptions, cost models, and service levels were developed by Aveas.
For the initial full IT outsource, Aveas were asked to lead Tata Motor Company through the same process and drew up an approach for parallel market engagement (and later down select and contract award).
Financial Analysis
Aveas owned the business case on behalf of the CIO – a very financial savvy leader. The business case was an essential element to all sourcing engagements as the CIO sought to publish them, and, hold the supplier accountable for delivering the cost savings.
Contract Development and Award
Aveas, working closely with their external legal team, led the contract negotiations on behalf of the client. We drafted the services schedules and led all non-legal negotiation sessions through to signatory.
What were the outcomes?
Following the completion of all of the sourcing initiates (and subsequent implementations also led by Aveas), JLR significantly reduced the supplier mix, reduced head count and enabled JLR to focus on their core competencies – building luxury cars. They achieved, with our help, an operating cost reduction of circa 40%, and significantly reduced the complexity of IT delivery, while expanding their overseas operations through the build of two new factories.
However, the benefits that we helped to deliver were not just for JLR but also Tata Motors who, on joining our programme, were also expertly led by us to equally successful outcomes.
What the client said
“Aveas is quick to assess and analyse complex issues and problems – dependable to a fault allowing nothing to fall between the cracks” – CIO, JLR
“Aveas pro-actively builds strong working relationship across senior stakeholders and external suppliers and commands respect in meetings” – Head of IT Operations, JLR
“Aveas’ commercial insight and negotiating expertise was instrumental in ensuring we had a robust and positive contract. Getting this right upfront was critical to the overall success of the project and allowed us to track and manage the overall cost base of the programme” – CIO, Tata Motors