News & Research: Client Successes

Case Study: Joint Venture for Three Major Railroads to Manage IT

ScottMadden worked with three major railroads to evaluate the benefits of creating a joint venture to run the railroads' data centers, manage their data networks and desktops, and develop and maintain applications.

• uThree major railroads needed to develop a number of expensive enterprise/industry-wide systems and wanted to investigate the possibility of joint development to reduce the cost and create industry standardization
• The client wanted to determine whether current IT services could be delivered less expensively  
• uLegal, regulatory, and governance issues associated with developing a joint venture among three major competitors needed to be understood

• uDeveloped a current-state business case that included all costs, development plans, architecture plans, and performance metrics
• uAssessed the desirability of an internal vs. outsourced joint venture solution
• uConducted legal and regulatory due diligence to ensure that joint venture structure met business and regulatory requirements
• uEstablished a governance model for the joint venture
• uDeveloped a future-state business case
• uCreated an outsourcing request for proposal (RFP) for a joint venture IT function, as well as for each company on a stand-alone basis
• Reviewed outsourcing RFP, identified potential outsourcing vendors, and recommended a final vendor

   

• uDesigned a joint venture that would increase railroad inter-operability through common systems, increase the ability to compete against other modes of transportation, support a faster time to market for new services, improve the ability to compete for scarce technical resources, share the burden of technology investments, and reduce the cost of ownership
• uIncreased expected realization of more than $55 million in net present value savings over 10 years