Telecom and Utility Contracts.
When to Review. Renew. Save.
We all have business utility expenses with contracts. Sometimes contracts are signed when you acquire a new business or when services change or need to be modified. In some situations, maybe (2, 3 or 4 years) have passed since that original contract was initially signed or reviewed. So you may be asking yourself right now… Who has time to review utility contracts, right? What if you knew there were items on that contract that you are being billed for… that you no longer need or could get a better rate for – would it be worth it then? What if you knew that in many cases businesses have saved $1,000’s by renegotiating contracts.
So where should you start? How about with your business utilities? That’s right your telecom, electric, water, internet etc… Often times upon signing a contract for services you many have agreed to special terms, bundles, promotional services and other cost saving items that seemed like a good fit at the time you purchased services. But are these rates still in place? Have they changed? Gone up? Or have services costs “crept in” (cost creep) where they should not have? Most companies only negotiate their telecommunication and other utility contracts every three to four years or longer. During that time frame much can change in the industry including: pricing reductions, new technologies, improved performance, SLAs, new managed services, platform convergence, changes in legal liabilities, insurance requirements, intellectual property rights, etc. including other key contractual liabilities that will be critical to the final agreement that both your company and the selected vendor will commit to perform.
Renegotiating a contract means that it meets or exceeds YOUR needs at the best price.
Negotiating a well-constructed contract can be challenging. Most businesses utilize the vendor’s standard contract with minor modifications to pricing, service level agreements, delivery time frames and warranties, without understanding what crucial liabilities and commitments they are making to the selected vendor along with the legal obligations inherited in the contract. The goal is to ensure that the final contract meets and exceeds your business requirements while minimizing the potential contractual and legal liabilities.
Why would you outsource your contract negotiations?
Cost reduction specialists help to reduce pricing, improve vendor support and modify contractual terms and conditions. Each of these areas are renegotiated to obtain maximum return on the contract. Specialists deal with these negotiations frequently and have a clear understanding of contract terms. They also have an in-depth expert knowledge of what language modifications have been previously accepted by vendors during similar negotiations. This helps them reduce contractual obligations that can increase your exposure, while minimizing your risk.
What should you expect?
• Ability to negotiate significant cost reductions over what was provided
• Contractual language that offers greater flexibility and scalability as you consume services
• Termination language that allows you to terminate for cause and impacts all aspects of the contract from revenue commitment to termination liabilities
• Improved terms and conditions to allow you to modify your usage or consumption of services without any contractual recourse
• A contract that is right-sized and unique for your company and will not allow you to default on contractual requirements
• Contractual language that enables both you and the vendor to work towards mutual business objectives to improve you service availability while maintain your business objectives
At LT~CRS we are your source to cost reduction in telecom and utility services. If you have any questions regarding contract negotiations – contact LT~CRS.