Reclaiming Expected Savings Reinforcing Fiduciary Control

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2 Inherent problems with outsourcing billing exist Over 80% of outsourcing bills have errors due to complexity of the contracts and volume of data Billing definitions negotiated by the provider s pursuit team often seem ambiguous to the delivery team Tools and filters needed by the provider to measure consumption often remain unimplemented because of stalled transformations Most billing relies on clean source data which rarely exists at inception and the billing rarely recovers Contractual inconsistencies and high provider turnover lead to faulty or inconsistent billing interpretations, which are difficult to identify Administrative systems that track the turning of consumption on and off aren t linked to billing...and even the best run companies struggle with validation Consumption metrics are difficult to practically define and validate against existing source data Accurate validation requires an integrated team with contract interpretation, technical and financial skills, which are frequently siloed Validation effort (including base bills, ARCs/RRCs, pass-throughs, software, hardware, third parties, credits, etc.) is often underestimated and understaffed with resources pulled to fight fires A non-holistic approach to governance fails to link performance issues with their corresponding billing impacts (e.g., refresh delays, transition problems, undelivered services, SLA failures) Slow or inadequate issue closure compounds billing problems and complicates resolution OBAS 2

3 Description of OBAS Services: The Solution Review and validation of all invoices for contract compliance and accurate consumption Including taxes, COLA, hardware, software, pass-through, and all other charges Interface with outsourcer on invoicing questions and issue resolution Recommend payment, dispute, or adjustments Develop documentation for informal and formal disputes, if needed Identify improvement opportunities Cost savings opportunities including demand management and utilization changes Market comparisons on rates and utilization metrics Contract modifications to resolve issues and clarify ambiguities Establish and maintain a central point for financial tracking and interpretation of the contract Respond to all client-internal i t l ad hoc agreement interpretation questions for consistency Develop and produce reports summarizing payments made or disputed, credits received, and payments forecasted Develop and implement contract training General assistance, advice and counsel on the outsourcing relationship Swingtide will assume the Outsourcing Bill Audit function for the term you desire. We can assume this function mid-deal or establish it at the beginning of your outsourcing transaction. At the end of your desired term, you can choose to continue with us, or we will train your staff and turn over the process to you. 3

4 Example: Counting Users 4

5 OBAS Benefits OBAS saves money by providing more efficient multi-disciplinary oversight than can be provided internally Actively identifies cost savings that are hard to find and realize without specific expertise Doesn t poison the outsourcing relationship over minor billing issues (good cop versus bad cop) Supports proactive consumption management Formally documents positions that will survive past the day when individuals who framed the deal have departed; these documented positions become the basis for identifying valuable performance and issue trends Outsourcer is kept on their game through their awareness of billing process scrutiny Provides responsible oversight of large expenditures that can stand up to internal and external audit scrutiny Strengthens issue resolution and governance through consistent contract interpretations and training Gives you a trusted partner (Swingtide) to go the next step and monitor your deal to ultimately drive additional savings (in outsourcing cost reductions) while maintaining the service levels you need Identifies problems early and avoids major billing wars to keep your relationship healthy Information developed through the OBAS process provides valuable information for mid-term or end-of-term options analysis 5

6 Why Swingtide? Who We Are and What We Do Expertise in the Full Life Cycle of Outsourcing Transactions Proven methodologies developed through many years of experience with different outsourcing deals, situations, and vendors Swingtide team members have negotiated numerous IT outsourcing contracts, set up client contract and billing governance, and managed transition and transformation programs to get clients to their successful end state We know where to look - Unique integrated team approach (finance, sourcing, technology, contracts) produces the most robust findings and is best suited to identify elusive savings opportunities Hundreds d of millions of dollars in corrections processed to date! Perfect Blend of Skills and Experience Team members include former CIOs, Finance VPs, Sourcing VPs, IT Directors, IT Architects, IT Project Managers, CPAs (public accounting firms and internal audit); delivering the integrated disciplines of sourcing, finance, architecture and operations Uniquely strong specialization in IT financial analysis and consumption management Consulting for companies on the cusp of change Companies contemplating outsourcing or wishing to improve existing outsourcing relationships IT departments under severe cost or service pressure Decentralized organizations trying to establish optimal shared services while maintaining business alignment Companies facing the complex IT ramifications of mergers, divestitures or reorganizations 6

7 Next Steps If you: Have unexpected charges and don t know why Can t effectively explain consumption to control it Aren t sure you re getting what you contracted for Have lingering open billing issues or disputes Haven t been able to get your arms around your outsourcing relationship and are ready to eliminate value leakage from your outsourcing deal through a cost-effective, multi-disciplinary and solution-oriented invoice review, then call us at: Diane Carco Swingtide, Inc. dcarco@swingtide.com Kevin Haber Swingtide, Inc. khaber@swingtide.com