SITUATION
The client is a manufacturing company with worldwide operations. Multiple carriers provide services to the client’s locations with a US based carrier providing data and voice network services for most domestic locations and an EMEA based carrier providing data network services for all international locations. The dual data networks introduce additional cost and complexity to connect all locations due to the need for dual connections at major sites. The client decided to issue a Request For Proposal (RFP) to eight carriers seeking a technological solution for a global data network. Upon receiving the responses, the client solicited the assistance of Value Sourcing Group resources with whom they had worked with before for wireline and wireless negotiations to provide guidance and methodology on how to deal with the responses and the multitude of options proposed.
SOLUTION
Value Sourcing Group immediately engaged and conducted an on-site strategy development session with the client’s team. Current market place rates and contractual terms and conditions were reviewed and incorporated into a request for offer package to use for upcoming negotiation sessions with selected finalists. Technological and functional project goals and objectives were identified and ranked in order of overall importance to the client’s business drivers. Each competing carrier was rated in relationship to the breath and reach of their data services and features. Three finalist carriers were selected for negotiations and the request for offer package of key elements was issued for responses. Subsequent rounds of negotiations were lead by Value Sourcing Group supported by the client team with each carrier until final deals were in place addressing all key pricing issues and contractual terms. A single carrier was selected for the domestic and international data network based on the weighted criteria established during the strategy session.
RESULTS
The overall savings was measured by hard dollar savings as well as cost avoidance items related to migration and transition costs to be incurred with each option considered. Hard dollars savings resulted in an annual decrease in cost of 26.8%. The savings were rated as best in class due to the fact previous negotiations two years prior lowered rates to the then market place level. The winning data services carrier also provided a significant portion of the wireless devices for the client. As a by-product benefit of the project, Value Sourcing Group initiated negotiations which resulted in additional concessions and savings on wireless monthly plans and device costs, plus obtained a one-time bonus for the client to use in upgrading existing devices.
IN CONCLUSION
Continued attention to carrier pricing and terms and conditions through periodic competitive negotiations will produce significant cost savings as network services market pricing continues to drop. This case study is an example of the efficiency and results which may be obtained by applying a tried and proven methodology and process. The Value Sourcing Group senior negotiator’s experience in dealing with similar situations and the understanding of the critical issues affecting the goals and objectives of the project were instrumental in achieving a best in class deal.
VALUE SOURCING GROUP OVERVIEW
Value Sourcing Group, LLC was established with offices in Atlanta, GA and Franklin, TN (Nashville) to serve clients throughout the United States. Founded by two senior telecommunications consultants with over 25 years of combined directed negotiations experience, Value Sourcing Group provides tried and proven methodologies, processes, research, analysis and expertise in driving high value results for its client base. With access to multiple pricing data repositories plus key research and analytical resources, VSG enters all projects with current market place rate knowledge as well as factual and relevant industry information. Exceptional savings results and enhanced contract terms and conditions are the rule rather than the exception due to the level of experience and knowledge possessed by each negotiator.