Sourcing & Contract Negotiation
What is Sourcing & Contract Negotiation?
If you’re looking for someone to take your place in the ring to beat up your favorite vendor for a 20% price cut, that’s not us.
We’re your start-to-finish guide for sourcing, ensuring that your business priorities are aligned with a negotiated contract that works best for you.
What’s the process?
1. Discovery + History Review
Most importantly, Seprio seeks first to understand your priorities.
From there, Seprio gets a bird’s eye view of the landscape of the negotiation. This includes existing contracts, proposals, RFx responses, and other relevant information from Client and vendors.
Seprio considers the competitive landscape and assesses whether cost-saving opportunities might exist from consolidation of contracts, changing vendors or services with competitive bidding, or asking an established vendor for a better price.
Seprio also looks at whether the terms and conditions of any existing or proposed agreements are consistent with your needs and industry standards.
Finally, Seprio looks to introduce new, or improve existing, KPIs or service levels.
2. Strategy & Negotiation
Using your priorities and the information gathered from the previous step, Seprio develops and delivers a recommended negotiation strategy.
As with everything, you ultimately review and approve the negotiation strategy prior to Seprio’s negotiations with a vendor.
The negotiation strategy will identify your key points of leverage for the negotiation, while Seprio works to maximize this leverage to achieve your priorities.
Once you approve the final negotiation strategy, Seprio will use that leverage to negotiate the price and contract with the vendor. Seprio will only engage in negotiations with vendors you have approved.
Once Seprio engages in negotiations, you’ll be presented and made aware of all developments through regular meetings. Seprio is a guide that is acting in your company’s best interest, so it should come as no surprise that you are ultimately the final decision maker at each turn. Basically, Seprio won’t go against your direction or go rogue on you and slap a contract down on your desk three weeks later and say it’s the best and final.
3. Contract Approval & Support
You ultimately make all decisions regarding the terms of the contract and will have final authority to approve or reject the contract negotiated by Seprio.
Once the finish line has been crossed, Seprio will provide you feedback on their sourcing process, including proposed changes or improvements.
When negotiations are finished, Seprio will provide you with a Project Summary Report that summarizes the overall project. This report will include a summary of the success of the project, as well as an outline of the mitigated risks of the agreement and negotiated cost savings. This is a very helpful document that you can revisit from time to time so you can remember the details of your deal and be prepared for the next part of your sourcing lifecycle.
Signs this is for you:
Don’t have a good handle on what is being bought and by whom.
Need processes for each part of the sourcing lifecycle
Wishing you had a sourcing professional to tell you whether a deal is good or not.
Don’t have time for an in-house team or yourself to do it.
Unsure of what the contract requires of you.
The pricing structure is a nightmare to understand.
Don’t feel comfortable engaging in negotiations with a vendor.
Uncertain of risk exposure without needing a lawyer to simplify it.
Currently negotiating with a vendor, wanting the best deal possible.
Contract renewals around the corner, looking for better savings.
Don’t want to hurt relationship with vendor, but need a better price.
Legal takes a while to process things because the contract is difficult.
Legal doesn’t have enough staffing to turn things around fast enough.
Not certain that contract is including everything you’re looking for.
Not sure you got everything in your SOW that you need.
Needing wiggle room on price, and vendor isn’t budging.
Sourcing Case Studies
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Retail | Nationwide Convenience Store Chain Needing ERP Solution
In February 2019, a midwestern chain of convenience stores was approached by their ERP provider regarding phase II of the rollout of the vendor’s ERP product. The Client, however, was not ready to begin phase II and would not be for over a year. However, the vendor’s fiscal year was ending in May so the negotiating team saw an opportunity to get significant savings by negotiating the deal early.
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Insurance | Farmers Mutual Hail Insurance Company of Iowa (FMH)
Farmers Mutual Hail Insurance Company of Iowa (FMH), an insurance company providing peace of mind to American farmers and their families, had their data storage evaluation narrowed down to a pair of finalists: their current vendor and another well-established provider. They decided to engage Seprio to evaluate the proposals and help with negotiations, as they had done in the past with great success.
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Organization | Mid-Sized Payer Organization
A mid-sized healthcare payer organization was 3-years into a 6-year commitment with their online benefit platform provider. The ever-present need to cut costs led them to take a deeper look at the products and services included in the agreement and renegotiate if needed.
The Seprio Promises
If you commit to the process, you will save more money than you pay Seprio, guaranteed.
You make all the decisions and sign off on the strategy before negotiations even begin.
We will not only support your relationships with your vendors, but we will also work hard to improve those relationships.
What can you expect from Seprio?
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Visibility
You’ll get full visibility into everything we do together, as well as the nuances of your unique circumstances.
As a decision-maker, it’s impossible to guide your team in the right direction without knowing where you stand today.
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Process Consistency
Great companies do the right things, the same way, every time. Our job is to make your job easier.
We live and breathe sourcing and vendor management, so rest assured you’ll cross the finish line with a smile.
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Risk Reduction & Cost Savings
This is one of those situations where it’s easier to show than tell. Don’t make it harder than it has to be!
You’re better off checking out the testimonials than hearing me try to say money & risk reduction a different way.