I was recently working with a client that was stuck in a sourcing ditch. The ditch was filled with mistrust, mismanagement, indecision, and a stack of proposals…. they couldn’t get out without assistance.  This client had worked with the same provider for a number of years and was considering expanding the work with their renewal.  But the deal came with baggage that neither side could shake off on their own and so they hired an advisor to help with get them on the road again.

Both companies had worked together in an effort to renew the existing agreement as well as add some additional work. However, there had been a history of uncertainty with billing for additional work as well as SLA reporting and client was not sure they were getting the best possible price. This is where the advisor stepped in.  By applying their benchmarking capability and testing the proposed prices against the market, the advisor learned that two of the client’s towers were too high. With that knowledge the provider was able to make the necessary adjustments that met the satisfaction of both parties, and the client was comfortable knowing they were getting market prices.

Some of the mistrust that had developed between the two parties festered due to poor governance on the part of both the provider and the client.  Interestingly, both parties agreed they had not governed the agreement well and as such the relationship suffered from mismanagement.  To reverse the situation, the advisor worked with both parties to craft a fresh agreement that included a new Statement of Work (SOW) with clear work responsibility and output in addition to the new market service level agreement.  This removed ambiguity from the agreement and allowed the parties to clearly manage to deliverables and service levels.

Before the advisor was engaged, the negotiations were stuck because of the client’s uncertainty of the provider’s price and the poor governance.  This led to indecision and wasted effort and money while attempting to craft a deal on their own.

In this case, an advisory firm with the right toolsets and experienced advisors was able to get things back on the road to success. This is just one example of the benefits of having an advisor. To avoid getting stuck in a sourcing ditch, consider outside help from a neutral advisory firm.