DSG Outsources to HCL: Case Study

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