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Introduction

This toolkit is an Excel workbook that provides a comprehensive framework for building a business case for the potential outsourcing of some or all Information Technology functions to include both Infrastructure and Applications Development and Maintenance.

Scope

The scope of the toolkit encompasses the establishment of a financial Baseline, the building of a financial Basecase for the timeframe of a potential outsourcing contract, and the development of a Business Case to determine the potential benefits to be derived from an outsourcing solution. However, it is not customized to a specific solution or scope. This toolkit is designed to be used with the Everest Infrastructure and ADM Data Collections toolkits and the Everest Infrastructure and ADM Pricing toolkits, but can be used on a standalone basis.

Contents

The toolkit is an Excel workbook with multiple sheets to include both input and output tabs. There are five primary input tabs:

The Data Control sheet slows the user to set values for various assumptions and control parameters, establish yearly growth/reduction rates for functional towers and sub-towers, and input growth factors for functional resource units (RUs).

The Cost Baseline is utilized to build a detailed FTE and cost baseline for all sub-functions and activities within the functions being evaluated, to include shadow costs and those costs that are being designated as out-of-scope. Controls exist within the sheet to ensure that 100% of collected costs are allocated and that spend totals and percentages are within expected ranges.

The Volume Baseline sheet is used to document baseline volumes for all resource units and to calculate the future volumes that are assumed in the Basecase.  This information can be provided to Suppliers for pricing purposes (possibly along with the baseline costs and/or other data).

The Basecase provides the basis of comparison to either market comparables or Supplier pricing in the business case. The Baseline is utilized as the starting point and is then adjusted for COLA, projected volumes and other changes in business conditions such as planned acquisitions or divestitures.

The Business Case provides a comparison of up to three Basecase scenarios for a given scope to one set of market comparables or Supplier pricing scenarios. Multiple scope scenarios and multiple Suppliers bids or solution options will require that multiple versions of the model be run.