Strategic Sourcing Partnership enabling Boral’s Strategy
Boral is Australia’s largest building and construction materials supplier with operations in all states and territories. The company is structured into two main operating divisions: Boral Construction Materials & Cement and Boral Building Products, supplying concrete, quarry products, asphalt, cement, bricks, plasterboard, roof tiles, timber, windows and masonry. Boral’s purpose is to create sustainable solutions for a worldwide building and construction industry. This means that whilst Boral is focused on delivering ongoing strong returns for its shareholders it is also focused on ensuring its businesses are sustainable in their environmental, social and employee impacts.
In the current business environment, Boral reassessed and redefined the business model redistributing the usage of applications across the business. Boral required the ability from an outsourced supplier for expert IT service and continuous improvement to cover application maintenance and support functional help desk. Boral also reviewed and retuned their license model and usage, under a single contracted solution to deliver cost savings to the restructured business.
In this context, Boral pursued a Strategic Sole Sourcing initiative with a single existing supplier aimed at realising tangible cost savings to support the continued use of its Oracle application suite and associated technology and hardware.
Costs Down Revenue Up (CDRU) was selected as the Strategy Sourcing Partner to support this initiative in ICT. The CDRU People and Sourcing Process have been collectively brought together to implement strategic sourcing assignments. The CDRU team led the engagement, augmented by the Clients Procurement function and Application Subject Matter expert.
The first step was CDRU working with Boral to baseline Applications Support Services costs. One of the main benefits of the CDRU process was the intimate understanding Boral gained around its existing services and related opportunities based on the forensic analysis of all costs.
CDRU facilitate a 4 month Strategic Sourcing process, comprising of a full tender for all in-scope services, which resulted in:
- Renewed supplier arrangement that delivers an overall reduction in ICT operating expenditure of between 20-30% p.a.
- Outsourcing a Functional and Technical Support Services delivered by an offshore service centre with the majority of the existing Client internal headcount released.
- Delivery of Transition to the new service model by CDRU on behalf of Boral, on time and under budget, including creation of a document repository containing over 5,500 documents.
Costs Down Revenue Up, as the name suggests, specialises in quickly identifying where cost benefits can be realised and where opportunities for increased revenue can be targeted, all within the bounds of a shared risk model.
“We appointed CDRU as our Strategic Sourcing partner across our applications support arrangements as they had a track record of delivering repeatable quality outcomes with tangible savings delivered.” says Boral’s Chief Information Officer David Oxnam.
“It was clear that CDRU had pre-existing application support portfolio templates to help us understand and present our complex enterprise requirements to the provider. We are all very pleased with what the CDRU and Boral team has achieved.”
From the initial meeting, both parties approached the engagement as a long term relationship opportunity, with CDRU effectively becoming an extension of the Boral team for sourcing, transition and vendor management. “Following our successful completion of the sourcing phase, it is pleasing that Boral has engaged CDRU in transition and vendor management.” says Ian Woollett, Managing Director of CDRU.