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DSG Outsources to HCL: Case Study

  • Publication Date:June 2010
  • Publisher:Datamonitor
  • Product Type: Brief
  • Pages:12

DSG Outsources to HCL: Case Study

In 2006, electricals retailer DSG International Plc entered into a multi-service IT outsourcing deal with Indian service provider HCL Technologies. Four years later, the two companies have agreed on a contract extension into 2013.

Scope

  • Discusses the DSG and HCL outsourcing contract and negotiations
  • Provides insight into IT outsourcing best-practices

Highlights

The run-up to this deal proved that price should never be the prime driver when choosing an outsourcing partner

A flexible partnership approach is as valuable as a low cost base

Long-term success requires significant commitment and investment from both partners

Reasons to Purchase

  • Offers insight into retail IT outsourcing negotiations
  • Provides recommendations for both retailers and outsourcers on ways to best manage relationships
  • Summary
    • Catalyst
    • Ovum View
    • Key Messages
    • The run-up to this deal proved that price should never be the prime driver when choosing an outsourcing partner
    • A flexible partnership approach is as valuable as a low cost base
    • Long-term success requires significant commitment and investment from both partners
  • Case Study
    • The genesis of the outsourcing deal
    • Having HCL manage IT support and development allows DSG to focus on its core business
    • Flexibility and value were the key reasons why DSG awarded the contract to HCL
    • HCL's presence made the original bidding process competitive, but didn't win the contract
    • Growing competition led DSG to outsource
    • For DSG, outsourcing is an extension of streamlining formats and process change
    • Business process centralization was the first area of focus for change and has already delivered benefits
    • Overhauling the store portfolio and offering dual formats is possible since the systems centralization
    • HCL's flexible and adaptable approach to partnership is key
    • HCL was able to respond to DSG's reduction in estate by scaling down services
    • Changes to internal systems led to a contract renegotiation around staffing levels
    • HCL has extended the services contract in order to support re-platforming to SAP
  • Key Take-Outs
    • Retailers and outsourcers alike must work hard to manage the relationship
  • Appendix
    • Background information
    • Ask the analyst
    • Definitions
    • Further reading
    • Disclaimer
  • List Of Figures
    • Figure 1: Characteristics of the outsourcing deal
    • Figure 2: DSG outsourcing timeline
    • Figure 3: Company profiles, DSG International and HCL Technologies
    • Figure 4: The top 20 retail outsourcing deals 2005 - 2010
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