“The Request for Solution process provided significant benefits compared to the
RFP-based sourcing processes we have traditionally utilized. In 24 weeks, we went from constructive discussions with six providers to a fully executed contract.”
Dr Pepper Snapple Group (NYSE: DPS) is a leading North American refreshment beverage company. The company manufactures, bottles and distributes more than 50 brands of carbonated soft drinks, juices, teas, mixers, waters and other premium beverages. Dr
Pepper Snapple (DPS) earned $5.995 billion in revenue in 2012.
Nearing the end of a long-term managed services agreement, DPS sought to evaluate its options and leverage a competitive sourcing process that defined a range of solution alternatives. The company’s over-arching objective was to drive transformational change that significantly increased service maturity and resulted in cost savings and other benefits, including improved speed to market, enhanced reliability and availability. Additional objectives included leveraging emerging technologies, specifically in the areas of data center/hosting service offerings. The executive team was also committed to a rapid decision-making and implementation process, coupled with assurances that risk factors could be effectively mitigated and that anticipated benefits could be quantified and tracked.
While attending an ISG client conference, DPS executives became acquainted with ISG’s
“Request for Solution” (RFS) methodology. Rapidly emerging as an alternative to the traditional sourcing models, the RFS takes a more open-ended approach by focusing on general problems, goals and objectives rather than on pre-defined approaches and specific terms and conditions. Rather than developing, socializing and agreeing on a detailed RFP up front, the RFS emphasizes a collaborative approach to identifying opportunities and defining potential solutions.
The objective of operational transformation through innovation, coupled with an aggressive timeline, made the RFS an attractive option for DPS. In a transformational scenario, where there is typically more than one right answer, the RFS can be particularly effective in facilitating creativity and innovation, and showing clients the range of possible alternatives.
DPS used an experienced and focused internal IT and Legal team, with support from ISG and external legal counsel, to execute the RFS methodology. DPS issued an engagement package based on the RFS model that solicited initial proposals from six providers. Through collaboration and dialogue between client executives, provider teams and ISG, the initial pool was down-selected to two providers over a 10-week period. This was followed by an
8-week due diligence exercise with the two finalists, who provided detailed transformation plans and firm pricing. Six weeks later, the winning provider was selected and contracts signed.
Client:
Industry:
Dr Pepper Snapple Group
Beverage
ISG Services: Sourcing Strategy client requirements
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Transformational change
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Alternatives assessment
Rapid implementation
Risk mitigation
ISG solution
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RFS framework
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Due diligence and down-select assistance
Provider selection and pricing support client benefits
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Commencement of transformation
Technology refresh
Cost savings

ISG experience has shown that the RFS methodology is ideal in situations where the client has previous sourcing experience, a clear sourcing strategy and existing service integration and governance processes in place. From a solution perspective, the
RFS is well suited for situations where the in-scope areas are subject to major innovation or transformation. The RFS process is also effective when speed to agreement is paramount and the transaction is solution-focused.
In the case of DPS, the agreement produced by the RFS exercise resulted in cost savings and a complete technology refresh, along with an immediate commencement of the transformation process.
DPS noted that the selection and negotiation process was significantly faster compared to traditional initiatives. The exercise also yielded a high degree of competition and solution diversity, and enabled an increased focus on solution development while reducing time and effort spent documenting responses. Finally, the collaborative nature of the process allowed DPS to gain greater insight into provider capabilities and solutions prior to downselect.
Information Services Group (ISG) (NASDAQ: III) is a leading technology insights, market intelligence and advisory services company, serving more than 500 clients around the world to help them achieve operational excellence. ISG supports private and public sector organizations to transform and optimize their operational environments through research, benchmarking, consulting and managed services, with a focus on information technology, business process transformation, program management services and enterprise resource planning. Clients look to ISG for unique insights and innovative solutions for leveraging technology, the deepest data source in the industry, and more than five decades of experience and global leadership in information and advisory services. Based in Stamford, Conn., the company has more than
850 employees and operates in 21 countries. For additional information, visit www.isg-one.com
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