Supplier Review & Benchmarking

Telecoms Contract Renewal

Challenge

Our client needed to ensure that its incumbent telecoms  supplier’s proposed charges for a three-year extension were competitive.

Our client had been in an outsourced telecoms services contract with the same supplier for 5+years and intended to renew services with the incumbent for 3-5 years and therefore required assurance that the proposed charges were competitive

Peru reviewed proposed charges service by service to provide a key input into which choices the client could make moving forward, e.g. how to exploit SD-WAN versus traditional MPLS

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Solution

Reviewed client’s requirements and current invoices to gain a detailed understanding of the scope, volumes and service levels of the new services

Peru liaised with client stakeholders to understand the context of the extension; history with the supplier, coverage of asset charges, commercial and service models

Peru’s database of outsourced contract pricing was mined to provide similar contract data to form a peer group for comparison of each of the services

All charges were adjusted to deliver a like-for-like comparison and calculate a fair market price range

Major variances were analysed and discussed with the client

Outcome

Significant value in building the business case

  • Our analysis provided significant value to the client in building its business case for the extension
  • Peru pinpointed areas where proposed charges were competitive. This allowed the client to focus its negotiations on the services that benchmarked as expensive
  • Peru’s review of the provider’s pricing highlighted the key drivers for further negotiation with the supplier. e.g. fibre to the cabinet (FTTC), IP telephony
  • Peru’s support allowed the client to answer questions from internal stakeholders on the competitiveness of the proposed charges and to enter commercial negotiations in an informed position
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Value

£500k per annum savings realised

Reduction of initially proposed annual charges for the extension of more than £500k

Key inputs to the internal approval processes for the new contract

Confidence on how charges compare to those of other providers

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