IT Sourcing

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Danish companies choose to outsource their IT services for many different reasons, but a common feature is that it is no longer just about minimizing 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.

At KPMG, we advise on 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. We assist both public and private clients and 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.

Christian Larsen

Director, Advisory

KPMG in Denmark

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We cover the entire contract lifecycle:

We offer strategic advisory services for a wide range of IT projects, including the modernization of legacy systems, cloud migrations, and sourcing strategies. Our expertise extends to outsourcing, in-sourcing, and complex acquisitions, ensuring that we meet diverse IT needs.

Clients often encounter challenges such as 'supplier lock-in,' where outdated contracts impede business growth and collaboration. These contracts can lead to conflicts and are difficult to exit due to inadequate system documentation. We address these issues by leveraging extensive experience and a global network, providing solutions that align with business objectives and support organizational growth.

We design IT sourcing strategies tailored to your business ambitions, offering in-depth analyses and benchmarks of IT contracts, prices, and service targets. Our end-to-end advisory services include expertise in platforms like ServiceNow, Ivalua, and Coupa, ensuring a seamless connection between strategy, planning, execution, and implementation.

The tender phase is a pivotal part of the contract life cycle, as it lays the groundwork for subsequent implementation, transition, and operational phases. Once a contract is signed, opportunities for changes are minimal, making it vital for all stakeholders to comprehend the tender process and its implications for end users' workflows.

Insufficient attention to IT sourcing strategy and business cases often hinders the realization of anticipated business benefits, complicating the evaluation of the tender process's success. Challenges such as lack of stakeholder involvement, inadequate research, inflexible timelines, cost overruns, and unclear project management frequently arise, affecting the overall process.

We offer comprehensive support in both commercial and IT technical aspects to ensure successful tenders. Our services are distinguished by extensive experience in sourcing IT services, including infrastructure and application development. We have deep insights into technologies like ServiceNow, SAP, and Microsoft Azure, and our approach focuses on client ambition, technological trends, ESG requirements, and information security. Collaborating with leading Danish law firms, we provide expertise in IT contract paradigms and standards, enabling us to navigate common pitfalls and ensure effective contract management.

At the conclusion of the tender process, a transition phase typically occurs where the new supplier assumes control over IT operations from the incumbent supplier. This phase demands significant expertise to ensure a smooth transition, as tensions often arise between the new and incumbent suppliers, with the client mediating between them.

Challenges frequently include the incumbent supplier's reluctance to cooperate with the new supplier, perceived as a competitor. This can lead to issues such as delays in documentation delivery, inadequate knowledge transfer, and insufficient resource allocation. Such challenges can result in a poor start to the collaboration, causing delays, budget overruns, or changes in service quality. In severe cases, legal challenges may also emerge.

We have extensive experience in managing complex transition projects for both clients and suppliers, as well as serving as an impartial third party. We guide you through IT transitions safely and securely, offering proactive advice to prevent potential issues. Our services include transition and program management to ensure timely and quality deliverables, knowledge transfer to meet contractual standards, contract management for milestone tracking, and proactive communication to facilitate smooth organizational changes.

At a time where selective sourcing and a diverse supplier portfolio are standard, contract and vendor management have become integral to IT organizations. The focus has shifted from cost-saving outsourcing to forming strategic partnerships that enhance business development and service offerings. This shift necessitates greater flexibility and more rigorous management of vendors and contracts.

The goal of contract and vendor management is to ensure contracts are actively used and managed, rather than being archived post-signing. This involves making necessary adjustments, maintaining deadlines, and managing finances. Common challenges include resource limitations and lack of tools, making it essential to prioritize efforts based on business criticality and financial implications.

We bring experience in process optimization and technical support, ensuring a market-leading approach to contract and vendor management. We assist with selecting the right technological platforms, optimizing processes across departments, and reviewing IT contracts for value assurance. Our services include requirements management and automation to reduce manual efforts. We also offer advisory services to elevate your contract and vendor management maturity, providing insights into market trends and best practices. Whether facing challenging supplier relationships or seeking improvement, we provide comprehensive support and guidance.

Benchmarking involves systematically comparing services to market standards. While often associated with price, it also encompasses commercial and technical contract terms, service quality, and financial aspects of IT organizations. This comprehensive approach ensures a holistic view of contract performance.

Benchmark clauses, though common, are underutilized due to perceived cost implications. Suppliers view them as cost drivers, and unused clauses can become expensive for clients without delivering value. Therefore, it is crucial to use these clauses effectively to derive real benefits.

We provide objective contract assessments to ensure market compliance and alignment with organizational goals. Our in-depth analysis offers insights and recommendations for contract improvements. With access to a vast database of IT contracts, we offer unbiased benchmarking and advisory services to enhance contract value, ensuring cost-effective, high-quality, and market-compliant IT contracts.

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