This project was awarded the Global Sourcing Association award for 'Value Creation' in November 2019.
Client Challenge
The Client, Electricity North West (ENWL), owns, operates and maintains the North West’s electricity distribution network, connecting 2.4 million properties, and more than 5 million people to the National Grid throughout Cumbria, Lancashire, Greater Manchester and parts of Cheshire.
Accelerating and dramatic change in patterns of electricity generation and consumption have set the industry significant challenges for maintaining a reliable service that still needs to be delivered via an aging infrastructure.
The business recognised that IT was key to meeting this challenge. The IT Leadership Team (ITLT) could see that delivering the next generation technology agenda needed a fresh look at the operating and sourcing models to ensure the right capabilities are grown or acquired to deliver the future services.
The Head of IT and Telecoms recognised the need to adopt current best practice and solicit informed independent challenge of current ways of working. Coeus were selected as ENWL’s chosen advisor following a competitive process.
Approach
Once appointed, Wavestone worked closely with ITLT to define and implement a new IT operating model, identifying the right skills and processes needed to design, build and operate the future IT landscape.
With the Target Operating Model agreed, we went on to develop ENWL’s sourcing strategy to deliver the capabilities and additional flexibility required at lower cost whilst leveraging supplier value-add.
A cornerstone of our work was a functional segmentation analysis which examined service maturity, priorities for transformational change and suitability for sourcing.
We evaluated circa 280 activities across 54 functional groupings that collectively make up ENWL IT delivery. This analysis included interviews with key stakeholders and the review of hundreds of supporting documents to form a full insight into all activities and their business criticality. Having created a detailed granular bottom-up view of activity, we worked with the ITLT to design a top-down functional model that would achieve clear flow of work and delineation of responsibility through ‘Plan’, ‘Build’ and ‘Run’ phases of the IT life-cycle for both traditional and agile delivery approaches needed by the organisation. This was wrapped with a lean approach to governance, vendor management and stakeholder engagement.
By overlaying both top-down and bottom-up views of the organisation we were able to identify and address areas where change was needed, e.g. gaps in current delivery model as well as areas of unclear responsibility or authority including resourcing and capability issues. This stage of analysis was rounded off with the creation of a comprehensive RACI model of the future organisation for IT and its ways of working with other functions / stakeholder groups.
The resulting Target Operating Model highlights include:
- Investment in proactive planning and business engagement to improve understanding of business needs and reduce development lifecycles
- Consolidated architecture function to enforce enterprise standards and reduce waste
- Investment in Vendor Management to drive better supplier performance and leverage
- Extension of ENWL’s SIAM capability to manage an increasingly multi-supplier future
- Investment in digital apps, analytics and continuous development capabilities required to deliver new functionality and business outcome
- Consolidation of multiple governance, communications, finance and reporting roles into a lean “Business of IT” function to improve quality and understanding of IT outcomes for the business
- Creation and agreement of an alternative sourcing approach that supported the overarching operating model and ensured the right blend of value, flexibility and quality from external vendors
The cost of this change was offset by:
- Sourcing model changes including some insourcing and modular re-tendering of key contracts
- Reducing the proportion of and reliance on agency personnel
- A rebalancing of teams to make better use of more expensive resources
- Right sourcing roles according to capability, control and cost
Results
The IT leadership team recognised the significant step forward that Wavestone delivered, which has enhanced the capability and reputation of IT within ENWL and ensured the team are ready to meet the future challenges.
The team were appreciative of the way we engaged with them to logically dissect and then re-build the Operating Model to ensure key challenges were met. Additionally, the quality of the analysis and clarity of the recommendations was acknowledged by the ENWL Board who had no hesitation in approving the proposed changes. Implementing the Sourcing Strategy will now be taken forward by ENWL who have been left with a legacy of collateral and guidance that will ensure success. Wavestone will continue to check in on progress and provide input where required.
“We chose Wavestone to help with our TOM and Sourcing Strategy because of the insight they demonstrated. The Wavestone consultants brought deep experience along with a sensible dose of pragmatism. They worked closely with my team and quickly developed a great rapport. This built trust and injected pace to what has been and will continue to be an exciting programme for ENWL IT. The quality of delivery has been exceptional throughout and has really accelerated our journey towards our goal of being ranked amongst the best Distribution Network Operators in the UK.” Karen Johnson, Head of IT and Telecoms”
Wavestone’s highly collaborative approach enabled the whole management team to contribute to and support the development of the future organisation. The consultants were passionate about our business and their knowledge and experience helped us to quickly define innovative solutions for our Sourcing Strategy, Target Operating Model and extending our SIAM capabilities that will enable us to confidently respond to our business challenges ahead.
The process was really effective in defining and agreeing responsibility for delivery both across IT&T and then with our customers. A detailed evaluation of business criticality and market conditions has led us to some important revisions in our sourcing model and vendor management focus. The engagement of Wavestone has delivered all we set out to achieve and more.” Tony Bell, Head of IT&T Service Delivery & Management
