For P&G, 'Always On' Is a Business Driver
- Drive additional business value from managed services outsourcing partnership
- Replace traditional, IT-centric SLAs with business critical process SLAs
- Require multiple vendors adhere to consistent standards for performance and reporting
- Company freed to focus on core business and driving innovation
- Increased end-user customer satisfaction ratings
- Mean Time to Repair for critical system availability outages significantly reduced
A decade after signing a groundbreaking managed services outsourcing contract with HPE (now DXC Technology), P&G asked DXC to take responsibility for the performance and availability of critical business processes and business impact, instead of IT-centric processes. The result: a new style of IT built on a framework that ensures P&G’s business is Always On.
For P&G, “Always On” is a business driver
P&G’s corporate goal is to touch—and improve—consumers’ lives. It’s a goal made more challenging by P&G’s size and complexity. The world’s largest consumer goods company, P&G operates in more than 180 countries and reaches some 4.8 billion people with more than 80 well-known household brands such as Pampers®, Tide®, Gillette® and Febreze® among others. The company’s operations—from its global supply chain to its marketing campaigns—are both extensive and intricate.
By partnering with DXC, P&G ensures around-the-clock business performance
One way P&G meets these challenges is by adopting leading-edge operational strategies. A prime example is outsourcing: P&G was one of the first global organizations to embrace outsourcing as a way to more effectively focus its internal resources on what it does best: innovate, launch, manage, and market its brands.
HPE (now DXC) emerged as an early player in P&G’s outsourcing strategy: in 2003, the two companies signed a historic managed services contract that gave DXC responsibility for P&G’s infrastructure, data center operations, desktop and end-user support, network management, and applications development and maintenance.
But P&G’s managed services relationship with DXC was meant to be a journey, not a destination. So recently, P&G and DXC agreed to a new, ground-breaking arrangement: they replaced their contract’s traditional, IT-centric Service Level Agreements (SLAs) with SLAs that measure business outcomes.
The objectives of P&G and DXC’s original outsourcing partnership, hailed at the time as one of the largest and most significant IT outsourcing deals in history—gave DXC responsibility for managing 85% of P&G’s IT infrastructure operations, 80% of its major applications, and 100% of its end-user support.
One of DXC’s primary tasks was to consolidate and standardize P&G’s IT infrastructure. This, in turn, drove efficiency and costs savings, while simultaneously improving the performance and up-time of P&G’s IT systems and applications.
The partnership delivered significant value over the years—a period when P&G doubled in size and tackled a number of large and complex IT challenges.
When P&G acquired Gillette in 2005, for example, it was the largest acquisition the industry had ever seen. DXC immediately began the IT integration and completed it ahead-of-schedule. This enabled P&G to start saving $1.2 billion annually earlier than anticipated. DXC also took on P&G’s largest IT transformation project of the past quarter century, transitioning P&G’s systems to DXC Next Generation Data Centers. This delivered higher availability and faster recovery for P&G’s critical systems, along with lower-cost services for less critical systems.
In 2008, 2009 and again in 2012, P&G awarded DXC its Global Business Services (GBS) Supplier Excellence Award, citing the account team’s strong track record of innovation and customer satisfaction.
The original agreement between the two companies, however, was very technology focused—as it needed to be. “Always On is a critical P&G program that defines our Critical Business Processes and the right business SLAs and outcomes. P&G and DXC worked in partnership to make this real,” remarks Pam Bernstein, associate director for P&G’s Global Business Services.
P&G needed IT systems that are “always on.” But for P&G, Always On is not about IT systems. It’s much bigger: it’s the company’s standard for the business processes that run on those systems. And as a highly digitized organization, it’s increasingly impractical for P&G to fall back on alternative, manual processes in “emergency” situations.
So P&G asked DXC to make an unprecedented change to its outsourcing contract: from now on, the company will measure the value of that contract in terms of business outcomes and business impact.
Under the new, critical business process SLAs, DXC is responsible for ensuring processes, such as the month-end closing of P&G’s books, perform as required by P&G users. This required DXC to monitor and report on end-to-end business processes and the business impact of any delays or service interruptions.
To help DXC accomplish this, P&G also put DXC in charge of a multi-vendor governance model. Through this arrangement, DXC is accountable for the performance and record-keeping of a number of key P&G vendors. This, in turn, gives DXC the means to influence vendors whose roles impact P&G’s critical business processes. In many cases, the technology underlying critical business processes has non-DXC components so P&G needed to give DXC responsibility for other selected vendors to help drive consistency and standardization within this underlying technology matrix.
One reason P&G had confidence DXC could deliver such next generation SLAs was because DXC, in the last 5 years, invested nearly $16 million in new tools and upgrades in monitoring and automation while implementing organizational changes to support it. This shift to more proactive service management and predictive analytics has, for example, resulted in a significant reduction in the number of events requiring manual triage—down from 80% in 2003 to only 5% in 2013.
A new Incident Command Center Dashboard aggregates alerts and system status data and displays it in terms of impact on critical business processes. Through this dashboard, P&G executives can quickly ascertain the health of these processes; should a process experience an issue of some kind, all stakeholders know immediately. And, through the DXC Always On application, status changes are available in real time on their mobile devices through a series of mobile alerts that enable P&G leadership to monitor status and availability of their critical business processes and track any outage or significant incident.
DXC also created a Rapid Response Team (RRT). If issues within critical business processes cross a predefined threshold, the RRT convenes technicians with expertise in every applicable technology—server, network, operating system, application—who mount a coordinated and multi-threaded response to drive incident diagnosis and repair. As a multidiscipline effort, the RRT fosters collaboration, accountability and parallel troubleshooting— factors key to ensuring issues are addressed swiftly and efficiently.
After DXC implemented the Incident Command Center Dashboard and Rapid Response Team Initiative, P&G saw a reduction in Mean Time to Repair [MTTR] for critical system availability outages with a corresponding reduction in unplanned downtime across these critical P&G landscapes.
With unplanned downtime substantially reduced, DXC turned its attention to reducing planned downtime—because even though planned downtime is predictable, accommodating it costs money. If the IT systems running P&G’s warehouses need to be taken offline, for example, P&G has to establish workarounds so that it can continue to operate during the outage.
The shift to the new SLAs is by far the most dramatic change to P&Gs managed services outsourcing agreement with DXC, but it’s not the only one. DXC has also taken steps to simplify its internal IT management processes and drive additional efficiencies. And, DXC has simplified processes associated with delivering IT projects. As a result, the time it takes to define project requirements and deliver initial pricing estimates to P&G has been dramatically improved.
*This success story was originally written by HPE-Enterprise Services, which has become DXC Technology as of April 2017.