As part of an overall cost reduction effort, a leading pharmacy retailer aimed to identify and actualize $1 billion of cost savings annually over a multiple-year period.
After two years, leadership set the IT department’s next two-year savings goal at $75 million. But with quick wins and initial savings already realized, the opportunities to further streamline were limited. They needed a partner to bring operational insights to strengthen IT management while unlocking additional cost reductions and efficiencies.
Deep dive into contractual spend key in trimming costs
Working with the customer’s IT leadership, Point B came to the table with ideas to promote cost savings such as evaluating hardware and software contracts, employee labor costs, telecom services, cloud computing and more. The team evaluated budgets and worked with HR to optimize human capital, initiating weekly status tracking and escalating barriers to leadership. The team then explored opportunities such as outsourcing and employee buy-outs, reviewed the application portfolio and refreshed procurement processes to reduce contracts and ensure more checks and balances around renewal decisions, and assessed stakeholder alignment and capabilities to measure the likelihood of success and the impact of changes.
Millions in cost savings realized
Through its work, the team identified $75 million of cost savings ahead of schedule and called attention to additional IT-enabled savings for other groups. Additionally the team improved transparency to leadership by clarifying opportunities, qualifications, impacts and expected outcomes; increased accountability by defining metrics and instituting tracking and reporting; clarified the IT operating model to facilitate understanding of cost-saving options; and identified opportunities for additional long-term technology savings and showed teams how to analyze usage and impacts.