Whitbread: Complex Renegotiation
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. This Partners were delighted to be chosen as Whitbread's advisors on their IT transformation programme.
In the words of our client...
“Whitbread engaged This Partners to help us reach the optimum solution for key data centre, application support, and application management services. These services were outsourced to a single supplier who was in the process of recovering from a lengthy period of lack of engagement and consequent impacts on service. We also had not proactively managed the supplier.
The Service Management and Delivery team at Whitbread wanted to switch suppliers, but both the IT Director and I were sure that the amount of cost and risk associated with such a change were prohibitive, especially given the large amount of other significant business development and changes to other systems and infrastructure that were underway at the same time. Finally, the equipment on which the services were running was either very old or obsolete, so a large transformation was also required. The contract had one year left to run when we started.
Working closely with This Partners, we were able to reach an excellent result, with new infrastructure, utility pricing for business flexibility, and a commercial deal that featured substantial savings net of transformation costs over a new five-year contract with the incumbent supplier. Specifically, This Partners helped very significantly with:
- Process: We identified and agreed objectives with the Whitbread team; our consultant ensured that we did not deviate from those. Also, we formulated a procurement process that ensured speed and minimal cost while maintaining commercial pressure on the incumbent supplier.
- Industry expertise: This Partners provided contacts in competitor vendors and helped to ensure that Whitbread had a proper hearing at the most senior levels, especially in the incumbent supplier.
- Commercial and outsourcing knowledge and experience: Valuable insights into what competitive pricing looked like and hands-on help to get us to the right commercial result.
- Trust and Integrity: Our agenda was the only agenda: the client’s welfare was all-important.”
Kenny King: Head of Procurement