The situation
A global logistics and supply chain provider was renewing a $52M Oracle agreement covering database and application licensing across its international operations.
The account was well run. The licensing position was understood and the obvious work had been done. The question was what remained on an agreement of that size once a full internal negotiation had been completed.
What we found
The remaining pricing value was unlocked through structure. How growth during the term is priced, what happens to rates when the estate changes, and how the commitment is framed against what the business will actually consume all move the total cost of the contract, and on an agreement this size they move it by millions.
That is where we concentrated, and the price came down with it. Structure and price are not separate conversations on a contract of this shape.
The result
- After the client's own negotiation
- $52.3M
- Final negotiated price
- $45.8M
- Further reduction
- 12%
- Savings
- $6.4M
$6.4M off a $52M agreement, on terms the client had already worked hard.
Takeaways
- The headline discount had already been negotiated
- The remaining pricing value was unlocked through structure
- $6.4M off a $52M agreement
Frequently asked questions
Is there room left after our own negotiation?
Almost always. Where it comes from varies: sometimes there is still room in the headline discount, sometimes it sits in the structural terms. On this agreement it was the structure.
How much can be saved on an agreement that has already been negotiated?
On this one, $6.4M. How much is available depends on the vendor, the contract and the circumstances, which is why we read the full context and run our 32 factor assessment on every deal.
Do you only work with companies that lack a procurement function?
No. Some of Deal IQ's strongest results come on well-run accounts, because the groundwork is already done and what remains is the part that needs a seller-side view.
DEAL IQ IN NUMBERS