Recent Telytics' Success Stories

Client Success Story #1 

Situation

A consortium of nine companies, half of which were Fortune 500, had a mid-term contract review for one of their services contracts with an $11 million annual spend, engaged Telytics to assist with the mid-term rate review negotiations due to the following circumstances:

• Telytics had conducted a previous Benchmarking project which indicated this services contract was at least 16% above market.
• Despite previously engaging other excellent, well known, outside resources for industry insights and legal advice regarding telecom contracts, the client’s negotiating team was frustrated in converting this advice into practical and meaningful contract negotiation results.  In the last engagement of one of these other firms the Client was told there was no opportunity to get further contract improvements.
• Carrier had previously changed contract language to require a three (3) year extension of term if any price revisions were made at mid-term review.
• Previous attempts to re-negotiate this services contract resulted in minimal 3% - 5% cost savings.
• Carrier offered proposal with similar modest savings, offering a two-tiered commitment schedule, requiring a much higher spend commitment for 90% of companies to get best rates.
• Proposed savings were based on savings offered for only a few select services, and only applicable to 50% of the member companies.

Engagement Type:  Fixed fee

Savings Guarantee:  First year savings to exceed 200% of fee.

Results

• Telytics’ expertise was able to break an existing negotiation stalemate and produce immediate results in meeting the client’s strategic goals and objectives.
• Telytics’ lead consultant negotiated a 13% reduction in contractual commitment relative to previous proposal.
• Negotiated rate reductions resulting in $2.1 Million in projected annual cost savings (19.2%) over the contract term at the lower commitment percentage for all members.
• Negotiated $300K signing bonus.
• Reduced term extension from three (3) years to two (2) while keeping mid-term rate review intact.  (Carrier had initially required that mid-term review language be deleted)
• The negotiated first year savings above the initial proposed carrier offer represented more than a 1000% ROI (over 3,000% over new contract term) relative to Telytics fee.

Client Success Story  #2

Situation

Large insurance company, with 400 sales offices, engaged Telytics to help re-negotiate their current services contract renewal.  Complicating this process were the following issues:

• Carrier had offered to renew current contract with 10% increase over current costs, eliminating current Term Volume Commitment (TVC) contract with an annual commitment contract, with a 30% increase in annual spend commitment.
• Carrier was trying to raise current flat rate T-1 access pricing by 23%
• Carrier was offering non-competitive rates for upgrading Sales office bandwidth from 384K to full T-1, which would increase Customer current cost over $50K per month.
• Carrier had a $1.35 million sub-commitment for VoIP services.

Engagement Type:  Fixed fee, with Savings Guarantee, additional savings bonus incentive

Savings Guarantee:  200% of fee based on first year savings.

Results

• Current TVC format was maintained with nearly over $2 million reduction in vendor proposed spend commitment.
• $1.35 Million current sub-commitment was eliminated for voice/VoIP services.
• Flat rate T-1 access cost increase was reduced from $45 to $6.
• The $6 increase in T-1 access cost was offset by negotiated elimination of cost for current MPLS Class of Service (COS) rates.  This turned a $20K/mo. rate increase to $4K/mo. savings
• Prices for all MPLS ports were reduced. T-1 ports were reduced by 50% over current cost.  All ports above T-1 were reduced by at least 20%.
• VoIP related rates were reduced by 20%
• Total cost for T-1 sites was additionally reduced.  This effectively reduced the cost to upgrade a 384K site to T-1 for $37/mo., while providing a 400% increase in bandwidth.
• General waiver of all new install costs.
• Preservation of current contract terms, e.g. rate review language, which Vendor tried to remove.
• Bottom line cost savings (including tax and surcharge savings) of ~$30,000 per month for existing services, with opportunity to mitigate over $50,000/mo. in migration cost to full T-1 bandwidth at sales offices.  This upgrade cost was now less than $15,000/mo., which was essentially covered by current cost savings.
• ROI over 300% in first year, over 1000% over contract term, relative to Telytics’ fee.

Client Success Story #3

Situation

Large Utility Management Company was having significant contractual, billing and service issues with incumbent vendor and engaged Telytics’ expertise to conduct contract negotiations for contract renewal.  Issues needing to be addressed included:

• The past contract term was marked by numerous, ongoing, billing issues, late delivery of invoices, and reluctance to provide any additional rate reductions for Customers TDM based services.
• The Carrier refused to offer any billing error resolution language improvements or provide any relief from late fees incurrent by Customer due to late delivery of invoices.
• Customer had many LEC based services, predominantly local private lines, to meet its business needs, which Carrier initially refused to negotiate any rate reductions for these services.
• Cost reduction for network infrastructure was a major driver for Client, but Carrier would only propose rate reductions for IP based services that the Client was not currently using.
• Carrier proposed eliminating local private lines as a contract contributory spend item, while creating a separate sub-commitment for these services.
• Carrier proposed a 10% increase in annual spend commitment, while eliminating $400K in annual contributory spend.

Engagement Type:  Fixed price, with First Year Saving Guarantee, additional savings bonus incentive.

Savings Guarantee:  300% of fixed fee in first year.

Results

• Telytics negotiated re-instatement of all previously contributory spend items, while reducing previous contract overall annual spend commitment by 25%.
• Telytics negotiated overall annual cost savings of over 20%.
• Largest cost element of Client network was reduced by 30%, additional cost savings in other areas were as high as 50%.
• Services that vendor had previous indicated were off limits to rate reduction were also reduced by at least 10%.
• Language was negotiated to reduce carrier time to resolve billing errors by 50%.
• Late fee penalties were addressed by changing payment terms, which Telytics escalated to Carrier CFO for approval.
• Client ROI was 400% first year, and 1200% over new contract term, relative to Telytics’ fee.

Let Telytics shift the balance in your favor...  call 760-918-5568 today.

Additional Client success stories can be selected above on left.