Value Sourcing Group

Significant changes in the telecommunications landscape consistently render most voice/data contract’s pricing and terms, negotiated within the past twelve to eighteen months, out-of- market, regardless of how competitive they were initially. On average, mid to large-size US corporations spend 20% to 35% more per year on voice/data services compared to recently negotiated contracts of similar characteristics. That’s a significant additional expenditure from your organization’s operating budget — and it’s a number you’d rather show as a cost saving.

A key component of strategy development includes our Contract Negotiations Workshop (CNW) delivery - designed to ensure a detailed understanding of the current telecommunications market place environment related to industry trends, network services rates, best practice contract elements and comprehensive negotiations strategy and tactics to employ. Prepared with this knowledge, upcoming telecom contract negotiations are more likely to enhance and increase both immediate and ongoing cost savings for your corporation. The key objectives of our workshop include:

  • Increase client’s value for telecommunications expenditures,
  • Provide our client with current competitive market place pricing information for wireline/wireless voice and data network transport services,
  • Develop and deliver a price benchmark report specific to the client’s volume and mix of network services,
  • Identify and prioritize key points to leverage in final negotiations, and,
  • Develop a negotiations strategic plan and timeline which will deliver optimum savings for your enterprise organization.

Value Sourcing Group (VSG) includes in the workshop a complete and comprehensive analysis of the client’s current pricing in relation to present market place pricing for similarly situated clients. We utilize our existing database of rates and pricing information, recently negotiated rates and independent research to derive specific price points for our client’s rates by service type. The following services are included:

  • Within Wireline Voice Services, the benchmark includes:
    • outbound interstate calls (dedicated-to-dedicated, dedicated-to-switched, switched-to-switched)
    • inbound interstate calls (dedicated and switched)
    • international outbound calling from the US
    • intrastate calls
    • audio and web conferencing
  • Within Wireline Data Services our benchmark includes:
    • IP VPN (MPLS based), Frame Relay and ATM services
    • IOC Private Line (per mile pricing)
    • Local access charges (DS1). 
    • Dedicated Internet Access services
  • Within Wireless Services our benchmark includes:
    • Monthly Plan rates and discount schedules
    • Monthly and annual credits and rebates
    • Equipment pricing and discounts
    • Waivers of fees and early termination penalties

The CNW price benchmark report will include calculation and itemization of our client’s rates by service type, calculation of average monthly costs and target rates based on circumstances relative to your specific current situation (i.e. expiry date of contract, willingness to compete the services, cost of change, etc.). VSG will also note substantial variances between current and target rates and various key rates from alternative providers, comparable to the incumbent.

Industry trends regarding pricing and carrier issues will be included, as appropriate to the client’s current environment and specific services. Also, VSG will present current best in class contract elements for consideration and inclusion in upcoming carrier telecom contract negotiation discussions.

The benchmark rates are delivered in spreadsheet format. Industry trending and contract element information will be delivered via PowerPoint. This review and preparation phase will take approximately two weeks, while requiring minimum involvement from the enterprise client’s resources. The delivery is performed on-site during a half-day session.

At the end of the session, our enterprise clients are armed with critical and factual information better preparing them for competitive request generation and subsequent contract negotiations. A VSG Senior Partner will also share recent carrier negotiation experiences and examples as well as provide input on anticipated carrier counter strategies and tactics. A strategy plan and timeline will be created to address specific goals and objectives. In the event, our client is preparing to conduct negotiations with the carriers using in-house resources, we will discuss our Request For Offer document and supporting tools used in extracting pricing and contract terms responses and commitments from the participating carriers. If VSG resources will be utilized to support the competitive request and negotiations, we will develop and outline our Targeted Contract Negotiations methodology, project timeline and next step action items.