How we negotiated $13M in savings for a financial services firm

Our client was a mid-market manufacturing company with approximately $80M in annual revenue  Our focus for savings was in reducing the costs of their carrier shipping services.

We created these savings in a 3 ways:

1. We saved them 20% on their LTL and FTL pricing by consolidating all of their existing contracts together from multiple locations into a single contract with a lower rate. We did this for FedEx, UPS and USPS
   
   
2. We analyzed their shipping needs optimized their shipping channels (FTL, LTL, Parcel, Train)
   • Significant cost savings were generated by moving lower priority packages from shipping with UPS to USPS
   • Select shipments were moved from road to train which is becoming an increasingly cost effective way to ship packages
     
     
3. We identified that slowing shipping down by 1 day would not impact the customer's business operations, but would reduce the overall shipping expenses by 10%

In total this created a $450,000 annual cost reduction for the company's carrier shipping contracts.

ERP & E-Commerce Engagement Overview

One of our clients recently engaged us to source, negotiate, and contract with a 1) Enterprise Resource Planning (ERP) and 2) E-Commerce software platform.

‍Key Activities

• Identified current state contracts and client-based obligations
• Developed a risk profile of current state contract language against enterprise project plan timelines and dependencies
• Utilized our proprietary decision-matrix framework to drive C-Level decision making
• Advised client on key dependencies to consider throughout the project
• Directly provided hands-on support/representation throughout the entire negotiation and contracting process

The Results (not comprehensive)

• $300K+ Cost Savings
• $275K+ Cost Avoidance
  • Milestone billing (vs. T&M)
  • Delayed subscription period start, etc.
• Significant contractual risk mitigation
  • Intellectual Property Rights
  • Eliminated Scope Ambiguity
  • Partner vs. Client Responsibilities
  • Joint Collaboration Agreements, etc.
• A really happy client

Client Name/Size/Sector:

• Company Name Confidential
• $15+ Billion Annual Revenue
• 5K+ Employees
• Financial Services

Supplier:

• Salesforce

Engagement Type:

• Client engaged “The Negotiator Guru” (firm) to deliver IT Strategic Sourcing Advisory Services to a specific business unit.  

Problem:

• While the client had a centralized procurement department (good thing), there was very little support from the IT department. In other words, the IT department operated independently and did not trust the client’s procurement department.  
• The client did not have a centralized spend visibility tool  
• Note: The client had SAP as their primary ERP system but was not able to accurately identify spend across regions as a result of poor reporting from the tool.  
• The client’s IT spend is broken between global and regional budgets depending on the application.  

Activities:

• Identified current state contracts across the globe
• Identified both influencing and decision-making stakeholders within IT and the Business Units that utilized similar software packages.  
• Coordinated global business units and stakeholder meetings to discuss opportunity, gather feedback, and drive results.
• Utilized proprietary tools, templates, and techniques to assign global roles & responsibilities, action items, and negotiation tactics in the interest of speaking from one voice.  

Results:

• Client Savings: $13 Million
• Negotiated the agreement down from $25 Million to $12 Million for a 3-year contract.
• Even though the firm was retained to focus only on a specific business unit, we identified cost savings opportunities that benefited multiple business units across the organization.  ​