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How Do You Spell Relief? As in Budget Relief: A Case Study

In the hyper-competitive, dog eat dog world of retail, strategies to gain competitive advantage span the waterfront. Acquisitions? Check. Omni-channel marketing? Ditto. Investments in new technologies? Check again. Consolidation to take out cost? Of course. Now how to accomplish all of the above, on-time and on-budget when both budgets and time are scarce resources?

 

THE CLIENT

One of North America’s largest food retailers faced all of these issues in spades:  thousands of locations,  over 125,000 employees operating under multiple regional and market segment banners including pharmacies, banking and apparel. It had just swallowed a large, publicly-traded drug store chain. With combined revenues approximately $50B, the success of the integration depended on tight timelines.

 

THE CHALLENGE

The client had been making significant investments in technology to lower costs and improve service in the face of increased competition. As a result of the acquisition they were also consolidating multiple platforms to deliver economies of scale. The transformation included replacing a wide range of software that supported help desk, IT governance, reporting and analytics, employee self-service and many custom applications. The result?  Elimination of 100+ servers, 20+ databases and over 3 terabytes of storage. Due to the project scale and complexity the implementation would span several quarters.

 The financial challenge? How to minimize OpEx and match costs to benefits. Balance current and future budget obligations, secure the lowest licensing costs for new software, install over two fiscal years and deliver accounting treatment to satisfy corporate and IT finance. No SaaS vendor could deliver. 

 Enter Central Technology Services

 

THE SOLUTION

Central structured an Enterprise Licensing Agreement (ELA) using SubscriptionCENTRAL that allowed the client to lock in lower costs on all licenses right away, while only taking delivery of the licenses as they were needed. A pre-determined, but flexible, deployment schedule delivered the initial licenses immediately while the balance of licenses were delivered over a planned one-year roll-out. This allowed the client to match the costs for the licenses and maintenance with the implementation of a dozen products and 20,000 users.

 

THE PRIZE

Using Central the client committed to a multi-year volume software purchase, negotiated the least expensive per seat cost and structured accounting treatment for an $8 million plus deal which delivered a 32% reduction in first year OpEx.  

Take advantage of Central Technology Services’ innovative licensing models that optimize accounting for software licences with volume discounts based on your future software needs and paying for unused capacity.  Our  software license solutions help you manage your business, balance sheet and EBITDA drivers to leverage the industry’s evolving range of subscription, cloud and perpetual license options.

Central Technology Services is the software industry’s leading financial services partner, specializing in assisting Fortune 1000 companies and their vendors to manage the financial, operational and budgetary issues associated with acquiring enterprise software and related technology assets.

 

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