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


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

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