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Vendor Contracts Optimization

Swingtide can help companies optimize their technology contracts portfolios by performing a review and analysis of third-party contracts, relationships and spend with its unique blend of sourcing, technical, and financial insights and expertise.

Optimization may include consolidating contracts with the same vendor, modifying contracts to align with current business requirements, or eliminating contracts for goods or services that are no longer needed.

This offering includes the development of a roadmap and action plan for quantified short-term and long-term savings with improved vendor relationships and greater contract flexibility. Administrative tools and processes are reviewed to ensure that benefits are sustained.

Many elements of the Vendor Contract Optimization offering are described in more detail in “Software Compliance and Software Portfolio Optimization – Balancing Disparate Risks” presented at an Information Technology Financial Management Association conference.

Ideal for Companies:

  • Needing external assistance in the optimization and management of their portfolio of technology agreements and vendor relationships
  • Lacking available resources for clean-up or optimization activities
  • Unable to leverage vendor relationships because of decentralized contracting practices or other process issues
  • Reducing or redirecting IT spend to higher business value
  • Seeking immediate expense relief
  • Facing M&A activities (divesting or spinning off businesses)
  • Consolidating operations (moving to a shared service model)
  • Facing inconsistent enforcement of preferred risk position in contracts

Key Benefits:

  • Align costs with consumption, enabling demand management
  • Leverage of vendor relationships through consolidation and renegotiation
  • Clean-up operations: take out unneeded licenses, circuits, assets; eliminate excess capacity to align with current business needs
  • Focus resources on activities valued by businesses
  • Eliminate wasted spend
  • Self-fund technology investments and operating improvements from existing budget levels
  • Helping to avoid common contracting pitfalls – confidentiality breaches, security risks, unanticipated product, support, and interface restrictions and impacts

High Level Approach & Deliverables:

  • We start with a discovery process that includes the review of financial records, identification of key relationships, review of key contracts and identification of any improvement activities
  • Then we elicit end state requirements from stakeholders with regard to vendors, products, service strategy, processes, current standards, and products to be eliminated
  • We synthesize the information collected in discovery and in stakeholder interviews to create a findings report that identifies functional or service overlaps among current agreements; excess capacity (e.g., excess licenses, overprovisioning of circuits); and strategy fits and misfits
  • We then create a roadmap and an action plan that prescribes and calendars specific renegotiation opportunities and documents role and process changes that will better support the optimized end-state
  • Optionally, we can lead or assist in the implementation of the optimization recommendations
  • The result: optimized third-party contract portfolio

Technology Business Advisory Overview

ISSUES, LESSONS & TIPS

Outsourcing relationships don’t end overnight

Undefined termination assistance services are not enough. Negotiate a termination agreement to identify the services, service levels, and charges that apply while winding down.

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