Outsourced Contract Negotiation

Sliding Line

  • Exevion was brought in to help a national body negotiate a multi-million pound outsourced service contract.

    The client had an existing relationship with a vendor but felt like the service had slipped over the contract term. Going forwards, they wanted to ensure, high quality service, deliverables were being met and that SLAs aligned with industry standards. We managed the project from deciding whether to change vendor to renegotiating the new service contract.

    Large-scale contract negotiations are complex, typical challenges include:

    • Stakeholders: major contracts will cover multiple teams with different requirements, using external support can balance these;

    • Communication: the relationship with the vendor must be kept constructive and focused on areas that give the highest value;

    • Perspective: using external support can focus negotiations in the right direction by balancing opinions across teams.

  • Exevion managed the service review and contract negotiation for the client.

    • Contract Benchmarking – our initial focus was to confirm whether the contract should be re-negotiated or a new vendor should be considered. We did this by benchmarking the contract across industry to confirm that the service was delivered competitively.

    • Cost Analysis – once the vendor was confirmed, we reviewed the contract to identify the areas where costs could be reduced. This included modelling capability profiles and savings from onshore vs offshore resourcing.

    • Service Level Improvements – we worked with the client stakeholders to understand where they required service improvements and communicated them to the vendor.

    • Contract Updates – we worked with the client and vendor to update the contract to ensure the service provided was of a high standard, and the contract was accurate.

    • Negotiation – we ran workshops with senior stakeholders on both the client and vendor sides to communicate changes and ensure that the relationship was focused on the future service.

  • We supported the delivery of a successful contract negotiation that achieved four key outcomes:

    1. There was a double-digit percentage saving on the total value of the contract;

    2. There was a negotiation of a significant section of the deliverables, including introducing reporting structures and regular SOP reviews to ensure contract compliance;

    3. There was a benchmarking of SLAs with targets improved to ensure that the service received by the client aligned with their requirements;

    4. There was a restructuring of the governance and penalties to incentivise a high level of service, continuous improvement and quick fixes when required.

  • By using external support, contract negotiations can be approached objectively to balance all stakeholders' perspectives and requirements. This helps keep relationships constructive between both sides and supports good working relations after the contract is signed.

    To do this, the service and contract should be reviewed objectively through managed processes which are communicated clearly to the vendor. This ensures that negotiations are focused on areas that will bring the highest return.

    Our comprehensive experience ensures that contract negotiations are executed efficiently, maximising the opportunity for high quality service.