Our client, a publicly traded communications company, was locked into long-term legacy agreements with two incumbent maintenance providers
The legacy agreements contained minimum volume commitments and automatic, annual price escalations
The agreements were approaching expiration, and the client needed to negotiate new terms and conditions
The company sought to develop a new contracting strategy that contained costs, while preserving the relationship with the incumbent suppliers
Axiom was brought in within 45-days of contract expiration and needed to develop a rapid sourcing solution
How We Helped
Axiom analyzed technical and business requirements and conducted price benchmarking against the market
Established that rates specified in the contracts were significantly above market benchmarks
Created a negotiating strategy to achieve client cost containment goals in the immediate term
Modeled and analyzed a new single-source solution and developed a migration plan to consolidate to one provider and achieve additional savings within 18 to 24 months
Value Delivered
Negotiated a short-term contract extension and realized immediate cost savings of 4%
Subsequently structured, negotiated and put in place new agreements with the existing vendors resulting in net savings of 9.4%, as opposed to an increase of 6% based on the legacy contracts
Introduced a new "preferred vendor" operating model allowing the client to validate the new single-source concept and evaluate transition to a single provider
