Contracts give good protection to all parties that are part of it but it is important not to see them as straitjackets and that they place any future actions into concrete until the contract has expired. Yes, the options available are going to be limited but it should be remembered that there are still some you can explore.
A recent project included costs for traditional landline telephones together with IT support and connectivity services. As the customer was in a contract that 18 months remaining they initially believed that there were no options available to them. They were wrong.
From using recent data it became clear the customer was not obtaining the market rate on the volume of their call activity.
Discussions were immediately opened up with the current supplier regarding a potential extension to the contract in return for improving the call rates in line with the market. As a further incentive, the client was prepared to bring forward plans to upgrade their connectivity infrastructure.
The potential costs to conclude the current contract early were negated by the supplier. New call rates were introduced and a plan agreed to upgrade the connectivity services were put into place. The supplier had secured the business for a further 5 years and the customer had reduced their costs by 30%.
Not all scenarios turn out this way but it is important to remember to at least investigate what is possible.
Here a few tips which you could use:
Don’t be afraid to reopen negotiations but treat your supplier with respect and make sure you are offering something in return for the outcome you are after.
If they are the right supplier they will see it as an opportunity.
At NJG Purchasing Services Ltd we believe that there are many basic tips and tricks which can help to reduce your company overheads with almost immediate effect.
We have produced an ebook to guide you through some of the more basic methods which you can implement alongside using NJG Purchasing Services.
As a procurement specialist for more than 30 years, I get the frustrations you face. Growing a business is complex and challenging, but don’t let high costs be your downfall.
No matter what size your business, any inefficiencies you have now will only get bigger as you grow. Getting lean and resourceful as early as possible, will enable you to build an efficient and streamlined business for the future…
We understand how frustrating it is when you know your overheads are high, but you don’t have the resources or expertise to get them down.
That’s why we do it all for you.