How we helped a South African parastatal save costs on procurement and avoid significant risks

Proper scoping and design can save huge costs

Company: Parastatal Health & Laboratory Services in South Africa

Case: New deployment of a system based on Oracle DB and Middleware

Cost avoidance

R 103.6M in procurement

R 158.8M in support costs

A South African parastatal was deploying a new system from an independent developer to manage their entire operations and this software required Oracle Database, Middleware and Java. Having no experience themselves with Oracle, they sought help from the vendor to assist with scoping of the licenses and hardware they would require for the environment. We were selected as the implementation partner and found that the customer’s planned deployment was non-compliant and presented them with significant exposure. We provided support between the company and the developers to understand the desired end-state and provided them with options to make an informed decision regarding their future procurement and the architecture of the solution.

  • Products in scope: Oracle Database, Fusion Middleware, Java, Enterprise Manager, Oracle Database Appliance
  • In-house datacentres
  • No SAM tools
  • Infrastructure: Oracle Database Appliance, Dell, VMWare
  • Users: 5,000+
  • External web app for consumers and contractors

Our solution

In order to implement the solution in a compliant manner from the onset and avoid exposure, the customer engaged us for a once-off project which included:

  • License administration
  • Compliance reporting
  • Optimization advice
  • Solution architecture consulting
  • Vendor negotiation services

We started the engagement by understanding what the license requirements are across the various environments of the new system as envisaged by the developer. We also identified areas of licensing which had not been considered by the customer or highlighted by the developer or vendor. Among these were licenses of which too few were sold to license the environment, Options/Packs which were not listed as additional costs but were required for deployment, as well as incorrect scoping on the Operating system/Virtualization required. Based on this, we provided a license requirement report which we compared to their license entitlements to provide a Compliance Gap Report which showed significant exposure.

Once we had an understanding of the current licensing position, we facilitated discussions and negotiations with the developer in regular sessions to assess the architecture of the system and possible alterations which could reduce license requirements while maintaining performance and availability.

Once an agreement was reached on an acceptable deployment architecture, we engaged with the vendor to negotiate usage terms of the licenses required and discounts on procurement of what was required.

Business impact and results

Based on our reports, the organization would have been sold an incorrect bundle of licenses and the expected deployment would have resulted in an exposure of R 301.3M over 5 years.

By using various licensing and deployment methods and negotiating procurement pricing, as well as restructuring the contracts in such a way that allows them to avoid the 3-4% annual indexation, we were able to save the customer 77% of this cost which resulted in a total saving of R 262.4M over 5 years.

The customer was so pleased with this result that they are in process of extending the agreement to a 3-year managed service engagement.

There is no reward bigger than finding someone you can rely on. B-lay helped us save costs, but they also showed that working together can bring great results on the long run.

This article was published on 01-10-2020