Case Study: IT Service Optimization Program for a Large 3PL — $6M+ in Annual Savings

A large third-party logistics provider was operating a substantial internal IT organization that had grown organically over years of expansion. The function was carrying the full weight of IT Operations, Infrastructure & Support, Security, Project Management, Digital Engineering, and QA — all internally.

The symptoms were familiar to anyone who has seen a mid-market IT organization stretched beyond its design limits: costs increasing year over year, no 24/7 support capability, a dedicated engineering team with high turnover, and unresolved disaster recovery and cybersecurity risk that the internal team simply didn't have the capacity to address.

Leadership knew the model wasn't sustainable. What they needed was a rigorous, data-driven analysis of the options — and a clear recommendation they could act on.

We designed and modelled four distinct IT outsourcing scenarios, ranging from the internal status quo to full outsourcing, and evaluated each against a consistent framework of cost, service quality, risk, and strategic flexibility.

Option 1 — Internal AS-IS (baseline) Retain the existing internal model with no structural change. No OpEx savings, and a trajectory of continued cost increases with no pathway to resolve DR/security risk. Value vs. risk: Low.

Option 2 — Outsource IT Operations & Security (recommended) Transition IT Operations Infrastructure & Support and Security to a Managed Service Provider. Fix the immediate DR/security risk. Gain SLA-driven service, 24/7 support and SOC, expert teams with advanced tooling, and governance and risk management — while retaining internal knowledge on proprietary and strategic functions. Value vs. risk: High.

Option 3 — Plus Commodity Engineering Extend the MSP scope to include commodity engineering functions and QA. Additional savings potential but increased transition complexity, higher staff morale risk, and a less knowledgeable bench on internal systems. Value vs. risk: Medium.

Option 4 — Fully Outsourced Model Outsource all IT core functions, retaining only select leadership and SMEs. Maximum cost reduction potential but significant loss of control, vendor lock-in risk, volatile transition, and high complexity given the industry. Value vs. risk: Low.

We recommended Option 2 — Outsource IT Operations & Security as the optimal path forward.

The rationale was straightforward: it delivered the best value-to-risk ratio. The client would capture meaningful, immediate OpEx savings, resolve the DR/security risk that had been deferred for years, gain access to expert teams and advanced tooling the internal organization couldn't cost-effectively maintain, and retain the optionality to move further down the outsourcing path if and when the business was ready.

Critically, the recommended approach preserved internal knowledge on the proprietary and strategic functions that differentiated the client's technology capability — the areas where internal ownership genuinely mattered.

We designed the MSP partnership structure to ensure the client retained governance and strategic control while the MSP delivered operational execution. Key design elements included:

• SLA framework with defined service levels for infrastructure support, security operations, and incident response
• 24/7 SOC coverage — addressing the security monitoring gap that had been a persistent risk
• DR and BCP ownership transferred to the MSP, with defined recovery time and recovery point objectives
• Governance model establishing clear escalation paths, performance reviews, and retained internal oversight

We built a detailed financial model quantifying the total cost of each option — including one-time transition investment, ongoing OpEx, and risk-adjusted cost of the status quo (including the cost of a security incident under the AS-IS model).

The model gave leadership a clear, defensible basis for the board conversation and the vendor selection process that followed.

• $6M+ in annual OpEx savings identified and modelled across the recommended and adjacent scenarios
• DR/security risk resolved through 24/7 SOC coverage and BCP ownership transferred to the MSP
• Service quality materially improved — SLA-driven delivery replaced best-effort internal support, with expert teams and advanced tooling the internal organization couldn't replicate at comparable cost
• IT organization rightsized through a structured transition plan that minimized disruption and preserved morale
• Optionality preserved — the recommended model positioned the client to expand MSP scope incrementally if the business case supported it, without committing to an irreversible full-outsource

Rigorous options analysis. We didn't arrive with a predetermined answer. We built the model, stress-tested the assumptions, and let the data drive the recommendation. That credibility was essential when presenting to a board that had seen consultants push preferred solutions before.

Honest risk assessment. The fully outsourced model looked attractive on paper. We were direct about why it was the wrong choice for this client at this stage: loss of control, vendor lock-in, volatile transition, and the complexity of the logistics industry made it a high-risk bet. Leadership appreciated the candor.

Preserving optionality. The recommended model was designed to be a starting point, not an endpoint. By structuring the MSP partnership to allow scope expansion, we gave the client a path to capture additional savings over time — without forcing a decision they weren't ready to make.

This case study has been anonymized to protect client confidentiality. Results are representative of actual engagement outcomes.