A mid-sized health insurance company was purchasing a new ERP solution, a complex and daunting task, encompassing critical back office systems. The relevant ERP vendors are notoriously hard to work with and the systems are very complex with different modules and integrated systems. In fact, the implementation costs for an ERP system are often as much as the software itself. Additionally, these solutions come with a lot of very real security concerns, as they often house the most sensitive HR, financial or even customer data a company possesses.
Objective
Achieve the best price and terms possible for a new ERP solution, including implementation, while mitigating risk to sensitive data.
Approach
With all sourcing negotiations, but especially when acquiring software with multiple configurations, modules, and integrations, the number one priority of Seprio negotiators is to understand what the client really needs, as well as what they really want (aka priorities). Seprio used these priorities along with their prior experience negotiating ERP solutions, working with the relevant vendors on other large contracts, and negotiating contracts with high data security risk to develop a negotiation strategy for this Client. Because this negotiation strategy was based on the client’s priorities, those priorities drove the negotiation. The scope of the implementation SOW, a very detailed and complex document, was locked down and a fixed price negotiated for all implementation services. This complex task was greatly simplified by the carefully documented priorities in the negotiation strategy, as well as Seprio’s past experience.
Results
The client ended up saving $1MM on the 5-year contract, a savings of 27%. They were able to rest a little easier knowing they not only saved a significant sum, but also knowing the contract and implementation SOW was custom built for their business and security needs (and wants).
