Contract Renewals
What are Renewals?
Renewals are self-explanatory; this is for companies dealing with contracts that are renewing.
Being ahead of the ball on contract renewals is crucial for any company, but especially companies with numerous vendor relations.
There’s missed opportunities if you wait until the last second. When a vendor sends a reminder on short notice, like; cost savings, current and future terms, effective date changes, risk mitigation, payment history assessment and correction, license quantity changes, and more.
Often, Seprio has run into vendors that sent a renewal contract that doesn’t line up with the original contract. When you don’t closely evaluate renewal contracts, these fine details slip through the cracks and land unnoticed on the P&L.
Every renewal is an opportunity to re-evaluate whether the contract is true to the original agreement, the vendor has been in compliance throughout the history of the contract, and if it can be better suited to your company’s needs.
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.
What’s the process?
1. Understanding the Landscape
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.
An analysis of your company’s needs today compared to when this agreement was additionally made is a crucial piece of this. Any changes that need to be made to the agreement are assessed.
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.
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.
Renewals Case Studies
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SaaS | Large Software Company Needing CRM Renewal
A large software company was in renewal talks with their CRM provider and was confronted with a potential 7% increase over the existing fees. The company was also beginning to re-evaluate the value of certain modules of the CRM product as well as the platform as a whole. Once they decided they were not in a position to move away from the platform just yet, they decided to engage Seprio to help negotiate the renewal agreement.
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Insurance | Large Health Insurance Company Renewing and Upgrading Software
A large health insurance company was renewing support on existing software and upgrading that software for Office365 compatibility. Seems simple enough. However, the initial quote from the vendor for the upgrade was over $150,000. While this may seem like a drop in the bucket compared to some bigger software contracts, the client knew they could still achieve significant savings
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Insurance | Mid-Sized Health Insurance Company Renewing Clinical Intelligence Software Tool
A mid-sized health insurance company was renewing a clinical intelligence software tool. The vendor provided a renewal document for this on-premise software tool. However, hidden within the renewal document were requirements that the client migrate from the current on-premise solution to a not-widely-used cloud-based solution, which involved both a different data protection risk profile as well as additional, unplanned costs as it required the purchase of other vendor products to run in the cloud.
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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Money & Risk Reduction
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.