Over $5M in Cost Savings
Boral is an international building products and construction materials group with the headquarter in Australia. It has three strong operating divisions: the high-performing, well-positioned construction materials business of Boral Australia; USG Boral, a fast-growing plasterboard joint venture in Asia, Australia and the Middle East; and Boral North America, a scaled and growing building products and fly ash business. Employing more than 25,000 employees and contractors, Boral’s operations span 850 building and construction materials operating and distribution sites globally.
- Align to the business initiative to cut operating costs.
- Realise cost savings of more than $ 5M for FY 2015 and FY 2016
Boral business was going through a tough market condition and Construction Material and Cement (CM&C) businesses embarked on an overhead cost reduction initiative due to the market pressure that had an impact on the first quarter result of FY2015. Some of these overhead cost reductions changes already occurred in the CM&C businesses with a number of staff leaving in every state of Australia.
Boral ICT needed to play its part in identifying cost reduction opportunities as part of the CM&C initiative. To align to the business initiative and contribute to the cost savings, Boral ICT committed to savings in the IT Opex budget by 30 June 2015 and ongoing savings in FY16.
75% of the ICT cost, however, was with external vendors, the cost reduction program would take longer to shape and implement. The ICT management team made some early estimates of likely savings to set up a specific target for the cost savings. Boral ICT was tasked with reducing costs by 10%. As most of Boral IT’s costs are outsourced this program would primarily have to address supplier costs.
The Boral ICT management team invited DLG to manage the program to implement the changes. The scope of the cost savings included all outsources services across applications, infrastructure and network.
There were four work streams established and each work stream had the following tasks to address cost savings. Each work stream established a cost baseline, confirm business benefits with business and seek approval of service change or cancellation from business.
- The Telco workstream included the following components and services across network.
- Satellite services on WAN
- WAN connections Optimisation
- Fixed line telephony platform
- Conversion of Telstra data cards in routers to Optus
- Unified communications
- The Infrastructure workstream included the following components and services across infrastructure.
- Redundant user accounts
- Hardware maintenance
- Cloud strategy & reduction in servers and environments
- Storage – unstructured data
- The Software & Application workstream included the following components and services across technical software and applications.
- Software maintenance FY15 and FY16
- Oracle software maintenance
- Oracle Exa move
- Dot Net development and support
- Application user admin
- The Print workstream included all printing environments across the organisation.
The Boral ICT successfully achieved the cost saving targets for FY15 and FY16 by changing service providers, removing unused services, and optimising service usages.
For the Telco cost savings, unused or underused lines were removed or rationalised, redundant services with suppliers cancelled, some of the services moved from Telstra to Optus, and WAN channels revised.
For the Infrastructure cost savings, unused user accounts were removed, redundant services with the infrastructure suppliers cancelled, some of the services with the supplier revised, and a few services moved to the Cloud.
For the Software & Applications cost savings, redundant services with suppliers were removed, the contract with Oracle renewed based on the current demands, Exa services changes, development software licenses revised based on actual usage, and application admin contracts renewed.
For the Print cost savings, a baseline print inventory was identified, and a new service provider selected.