Contract Alignment service
After completing the Inform and Interpret steps of the HyperSource.IT process, many RampRate customers find that their existing contracts have fallen out of alignment with their strategic direction, market conditions, risk tolerance, or other dimensions.
The Contract Alignment service works with your existing providers to remedy these gaps mid-contract by using RampRate’s collective buying power, and win-win trade-offs that increase value for both sides.
Typical results include:
- 10%-50%+ reductions in operating expenses (average of 23.7%) OR proportionate increase in services with no incremental costs
- Drastically reduced relationship risk
- Remediation of critical operational / performance issues
- Improvements in customer sat and better day-to-day operational processes
- Performance improvements that can lead to revenue increase (e.g., reduced latency)
- Transparency in pricing models, delivery commitments, contracts, and performance
- Cost certainty for future changes such as expansions, scale-down, and termination
When You Should Consider Contract Alignment
While RampRate has found success in most of its Contract Alignment engagements, the best outcomes have been achieved on behalf of buyers who:
- Have grown and evolved since contract signing
- Are buying services in rapidly evolving markets (co-lo, cloud Computing, network, wireless, etc.)
- Have a pending event such as growth, consolidation, acquisition, or scale-down / termination
- Are able to work with RampRate on aligning around a single message and rules of engagement
The Contract Alignment process is composed of 6 steps:
- Inform – identify what you’re buying, at what cost, with what terms, and at what performance
- Interpret – compare to market and ideal outcomes
- Optimize – build leverage by defining the “carrots and sticks” to be used in a negotiation, and add in RampRate’s collective buying power
- Execute – map trade-offs – work with providers to identify their wins and priorities for a true value exchange – e.g. moving away from legacy services to newer ones or giving back capacity they can resell for more
- Negotiate – use time-tested strategies for growing the pie and ensuring you get a larger slice
- Implement – ensure that agreed-on improvements are in the final contract and project the impact in terms of savings, performance, and risk improvement.
How Much It Costs
The Contract Alignment service is fully performance-based, with a guarantee of a 300%+ return on each dollar invested. It is composed of an up-front payment (the Project Fee), which is refundable if the process is completed without a result, and a share of the savings or other return on the project.
Sales cost reduction
We’re not just better negotiators with better data – we also cut your provider’s cost of serving you so they can pass on the savings. Our process often replaces expensive multi-tier sales organizations with objective forms; 1-2 year sales cycles with 2-month closing; ill-fitting and unclear RFPs with perfectly pre-qualified opportunities; and a drawn-out legal process with pre-templated best practices contracts.
- All flavors of hosting, ranging from wholesale data centers to managed hosting and cloud
- Public and private cloud computing and storage in IaaS and PaaS delivery models
- Data networking, including both IP transit and data transport services such as PLC, MPLS, etc.
- Content delivery network services, including core delivery and value-added services
- Telecommunications, including switched and packet-based landline and mobile
- Server and desktop support services, including remote infrastructure management (RIM)
As a master contractor working with targeted partners:
1. My contract just began / has several years to go. Can something be done for it?
Many of our most profitable engagements were mid-contract. Unlike other gainshare-based negotiators, RampRate’s Hypersource.IT platform creates reputational capital for providers and identifies adjustments that they want to make – even mid-contract.
2. Why would a provider give RampRate a bigger discount than they would give to me?
We manage supplier reputations and bring them into more deals if they are pliable mid-contract. We also know sales org structures, incentive programs, and other organizational secrets that may make it more attractive to a provider to have you buy $1 of one service than $10 of a different one.
3. Won’t this spoil our operational relationship with the providers?
We will not send any correspondence to a provider without your advance approval on the strategy and the messaging. That said, this is a normal course of business for all suppliers, and while they may prefer that the client not have a strong and knowledgeable advisor, they understand your need for ensuring your strategy is optimal. During the process we take on any negativity and ensure all your interactions remain positive.
4. I have a strong procurement department and a lot of cost savings initiatives in place already. How can I be sure this will add value?
Our clients include some of the most efficient and effective IT and sourcing organizations worldwide. We have worked to improve their existing initiatives – e.g., reducing termination penalties so they can migrate to a cheaper solution, as well as creating our own programs.
5. How does the savings fee work if my usage grows / shrinks, or I add / remove services?
Our pledge is to never take credit for savings we don’t create. That’s why we calculate all savings on a unit cost basis – if you buy a widget for $1 today and for $0.80 after RampRate, you have saved $0.20 per widget and pay us a share of that $0.20 for each widget you actually buy, regardless of whether your volume grows or shrinks. Usage changes only count as savings if we identify and remove unused capacity (e.g., dormant wireless accounts.)
6. How can you be sure that you will save me at least 3x your fees?
Our results are supported by a track record of our methodology leading to consistent savings. In smaller engagements, we may also do a preliminary review to ensure that the scale of the deal and the potential savings don’t make the project less viable.