Whitbread: Collaborative Success
Whitbread is the UK’s largest hotel, restaurant and coffee shop operator with 43,000 employees and serving more than 22 million customers every month, with well-loved brands that include Costa Coffee, Premier Inn, Beefeater Grill and Brewers Fayre. Whitbread is pursuing an ambitious growth strategy both in the UK and overseas and annual revenues in 2014 were £2.3Bn with profits of £412M which represented double digit growth in sales, profits and dividends.
In 2011 the majority of Whitbread’s IT services were being delivered through a contract that was due to expire in March 2012. Despite the criticality of the contract it was Whitbread’s worst performing service contract with Whitbread experiencing major data centre outages and recurring security issues. There had also been a lack of innovation and investment for a number of years leading to obsolete and ‘end of life’ equipment. Whitbread approached This Partners to ‘Explore the options and recommend the best sourcing strategy for Whitbread in relation to the expiry of its IT service contract’.
Whitbread were keen to see if the relationship with the incumbent could be repaired and levels of service improved whilst also exploring alternative options. This Partners approach was to pursue a parallel strategy of renegotiation and remediation with the incumbent whilst also exploring what could be achieved through a competitive market exercise. Through transparent, informed and collaborative engagement with a select number of appropriate service providers, including the incumbent, we were able to explore the ‘art of the possible’ and discover ways to achieve greatly improved quality of service, reduced levels of risk and lower cost. Our open and honest approach introduced competitive tension whilst keeping all parties engaged enabling Whitbread to reach an excellent result by negotiating an improved contract with the incumbent supplier. Key features were a new and transformed infrastructure with greatly increased resilience, business driven SLAs with flexible pricing and a commercial deal that featured substantial savings (c.30%) over a new five-year deal. In addition, there was increased board level focus from the incumbent and a significantly improved mutually beneficial relationship.