Strongbow drove $1.7M in annual savings (net run-rate reduction) and eliminated annual overages of >$1M while at the same time purchasing more services that were of true benefit to the CDO organization (removing services that were not of value from the contract)
Client Situation:
- Fortune 10 Healthcare company with 10,000 locations across North America
- Current annual expenses with a leading content distribution and internet security services provider spanned multiple contracts for different services with various expiry dates and conflicting terms
- Due to increased usage under the current billing model, cost increases of ~25% year over year were expected to continue without corrective action
- In addition, the un-managed use of professional services was adding to the budget challenge and creating an internal skills gap
Strongbow Approach:
- Strongbow developed a detailed services inventory, quantified savings potential, and identified additional opportunities for commercial improvements
- Although the service provider was given specific rate and commercial guidance, the long term incumbent didn’t feel any threat of loss, and resisted offering appropriate financial and commercial concessions
- In response, Strongbow launched an executive escalation strategy that highlighted the even greater savings which could be achieved through the introduction of competitive alternatives
Result:
- By leveraging a different channel partner, the client realized $1.7M in run rate savings without the cost and disruption of switching providers
- In addition to negotiating a pricing model that provided a buffer against future cost overruns, Strongbow recommended additional actions to diversify the supplier base to help avoid future supplier complacency