Client story

Optimizing for resilience: $200M savings powers strategic transformation

  • Retail, Beauty & Luxury
  • Sourcing & Services Optimization

Client profile

A global retail and media leader faced significant challenges in modernizing its operations and technology landscape and executing an organization-wide turnaround strategy. With a large internal technology team and incumbent vendors, the client was under pressure to optimize costs, adapt to shifting customer demographics, and resiliently position itself for future growth. The company needed a trusted partner to provide both strategic guidance and actionable solutions.

The challenge

The client’s enterprise value was steadily declining as shifting demographic trends disrupted how they engaged with both new and existing customers. Traditional strategies were proving ineffective, and high technology and SG&A spending were compounding the challenge. Most critically, the client sought a technology partner that could play a long-term strategic role—acting as a thought leader to drive technology decisions while introducing best-in-class capabilities, including AI and automation, to transform their IT processes and operations.

The stakes were high: they needed to achieve significant cost savings, reinvest in strategic initiatives such as streaming services and digital platforms, and implement governance practices to achieve and sustain improvements.

Our approach

Wavestone stepped in to provide a comprehensive, methodical approach to help the client address these challenges. Our engagement focused on delivering cost savings, ensuring accelerated speed to value, and ongoing management of risks while simultaneously enabling transformative growth.

The project began with a thorough analysis of the client’s technology landscape and evaluation of tech service provider proposals. We conducted a series of stage-gate analyses on provider candidate solutions, ensuring a deep understanding of down selected provider solutions and identifying areas for improvement. This process warranted a “look under the hood” to validate vendor solutions and challenge the status quo.

Building on these insights, we facilitated the development of the business case that evaluated the cost-to-serve, speed to value, and associated risks of different solutions. This groundwork enabled the client to make informed decisions on the optimal strategy for the future of their technology operations.

Wavestone then led iterative joint solution design and solution validation workshops with the client’s stakeholders and selected provider. We created a comprehensive specification package to guide the contracting process. Our collaborative, flexible approach ensured alignment with the client’s long-term goals and priorities.

As the business case evolved through joint solution design, we moved into contract negotiation and ultimately transition preparation and governance support. In just two months, Wavestone facilitated interest-based contract negotiations with the provider’s legal team and external counsel. The result was a favorable agreement that surpassed the client’s objectives and set the stage for long-term value delivery, while keeping speed to value top of mind.

To ensure the success of the transition, the provider introduced GenAI-powered solutions and automation tools to the client’s service desk. This included real-time translation capabilities, automated ticket resolution, and proactive incident management powered by advanced analytics. These innovations not only improved operational efficiency but also enhanced the end-user experience.

Partnering with a technology leader is not just about cost efficiency; it’s about building a future-proof foundation that drives innovation, agility, and strategic growth. By integrating a world-class partner, we transformed both technology and core business functions, essentially transforming technology into a true enabler of business success.

Michael Major, Senior Manager at Wavestone

Results delivered

The impact of Wavestone’s work was transformational. Over the course of the engagement, the client achieved more than $200M in cost savings, representing a 13% reduction in technology expenses over five years, and maintained cash flow neutrality in Year 1, which allowed the client to launch major strategic initiatives in Year 1, without the negative cash impact that commonly affect the first year of typical sourcing agreements.

Operationally, the client realized a more than 30% reduction in OpEx through automation and sourcing efficiencies. These savings were reinvested into core business initiatives, including the development of new retail systems, streaming services, and innovative digital platforms.

In addition to financial gains, Wavestone helped the client establish and institutionalize a robust governance framework to oversee technology operations, vendor performance, and ongoing strategic alignment. This included guidance on PMO structures and steering committees to ensure transformation continuity, while addressing the client’s challenge of multi-vendor governance by ensuring the vendor assumed full operational responsibility and accountability for the technology environment.

  •  13% reduction in technology expenses over 5 years
  •  30% reduction in operating expenses

Client benefits

Through Wavestone’s support, the client successfully transitioned its technology operations into a driver of business value. The organization is now better positioned to compete in a dynamic market, with:

  • Enhanced Cost Efficiency: $200M in savings and a 13% cost reduction over five years.
  • Innovation Integration: Advanced AI and automation capabilities that improved service delivery and responsiveness.
  • Reinvestment in Growth: Redirected savings into strategic business areas, such as streaming and digital platforms.
  • Strong Governance: A sustainable model for managing vendor relationships and ensuring continuous improvement.

What’s next?

The transformation of the client’s technology operations has set the foundation for long-term success. With Wavestone’s continued advisory support, the organization is well-equipped to tackle future challenges and seize new opportunities. By aligning technology with strategic business goals, the client is positioned to maintain a competitive edge and drive sustainable growth.