J Sainsbury plc
Scenario
Consultancy re outsourcing to Accenture
Situation
In November 2000 J Sainsbury plc announced its plan to outsource
its supermarket IT functions to Accenture in a seven-year
deal valued at around £1.7 billion. Many months
in the making, the deal is central to the firm's long-term
recovery strategy, and is believed to be amongst the biggest
such deals forged in Europe in recent years.
The outsourcing contract encompasses the design, build, and
implementataion and operation of all IT systems and networks
for Sainsbury's Supermarkets. Around 800 staff transferred
to Accenture on 12 November 2000.
"This is a very ambitious programme to replatform
all our systems as well as operate and maintain all our
IT assets," says John Adshead, Sainsbury's group
board director for IT and Human Resources. "We are
doing it in such a way that it reduces our costs and provides
us with a real competitive advantage in the marketplace
within a two to three year period"
Charteris Role
Negotiating the contract was a considerable task, involving a multi-disciplinary
team from within the business, supported by external advisors.
Charteris was a key member of the team – providing advice
and experience of organising and negotiating complex outsourcing
arrangements.
Following the successful conclusion of negotiations, Charteris provided
continuity and expert support to the Sainsbury's board
by continuing to advise them on the development and management
of the contract.
Solution
Charteris staffed key contract management roles until permanent
replacements could be recruited and trained, and developed
a governance framework for the contract. Charteris was
also responsible for:
- Managing the contract governance committees, including the finance committee which comprised Sainsbury's board directors and Accenture senior partners
- Developing the process by which Sainsbury's initiated new projects with Accenture
- Developing a way for Sainsbury's to test value-for-money for projects (given that they are single-sourced to Accenture)
- Developing the "balanced scorecard" which was to be used to determine (bonus) payments to Accenture
The support provided by Charteris ensured that Sainsbury's
and Accenture established a successful and effective partnership
to deliver the planned benefits throughout the term of
the contract.
"Outsourcing firms are very professional people," says John Adshead,
"who bring a lot to the party, but who expect to
work with a well informed professionally advised, determined
and competent client. It was important to us to have top
quality advice and Charteris provided that from people
who have done this sort of thing many times before, and
who have a strong ethos of adding value in everything
that they do."