CASE STUDY

Reducing Spend Overages and Facilitating Additional $150K in Savings for a Middle Market Corporation by Performing Pricing Model Analysis

Oct 22, 2019

IT Industry Overview

Mid-market leaders’ confidence in delivering next-generation IT systems seems to be dwindling now. Firms that earlier had the budget to meet the priorities for growth, security and reducing operational costs, are not so positive about their business’s financial outlook. They feel overlooked by partners, investors, and the government. Minimizing budgets, recruitment and security has become more challenging for mid-market companies and compelling them to re-order their priorities to remain competitive. The pressure to deliver new collaboration, reduce risks and costs is forcing them to perform pricing model analysis, achieve savings, and improve transparency for different processes.

Business Challenges Faced

The client, a middle-market corporation in the UK offering IT products and services wanted to perform a benchmarking and pricing model analysis of multi-functional devices (MFD). They wanted to analyze equipment leases and service agreements in order to achieve savings and create transparency. However, the client lacked an effective equipment policy that could keep pace with the rapid growth of the organization. As a result, the client had to lease MFDs from various vendors. The absence of a consolidated asset list, lack of transparency and control around billing, lack of unclear lease terms were proving major roadblocks in their growth. This compelled the client to engage with SpendEdge and address escalating costs in this area.

Inability to perform asset pricing model analysis and address escalating costs can prove to be a major barrier for the growth of middle-market corporations. Request a free proposal to access our complete portfolio of pricing model analysis solutions.

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Our Research Approach 

SpendEdge’s experts performed pricing model analysis and analyzed the Service Level Agreement to help the client to delineate service response commitment. They assessed equipment, performed usage analysis and identified potential cost savings. This helped the client to conduct RFP with multiple vendors, measure key metrics, compare bid results and KPIs. With a pricing model analysis solution, the client was better able to negotiate the final pricing plan and contract with the incumbent vendor.

Moreover, the insights gained from the pricing model analysis helped the client to consolidate all equipment leases with a single company, align all leases to end on the same date, and separate and aggregate service agreements within a period of 30-days. Separation of service from lease charges and one price for all MFDs with consolidated invoices enabled the client to pay for actual usage and reduce excess spend substantially. It allowed the consolidation of supplies and helped them streamline equipment types.

Engagement Outcome

SpendEdge’s pricing model analysis helped the client to reduce costs by over 40% for long term contracts. The insights offered also helped the client to eliminate contractual obligations regarding auto-renewal obligations, renewal fees, and spend overages resulting in an additional $150K in savings.

Wondering how you can conduct effective benchmarking and pricing analysis? Subscribe to SpendEdge’s platform and gain exclusive access to our reports for conducting pricing model analysis.   

Benefits of Conducting Pricing Model Analysis

Some of the most common benefits of performing pricing model analysis are mentioned below:

  • Enables the comparison of the total cost of acquisition with competing bids.
  • It helps your business gain better control over the competition and achieve significant cost benefits.
  • Allows the comparison of past quotations for the same product or service to determine the viability of the current quotation.

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