Organisations increasingly rely on complex relationships with third parties. Getting value for money from these contracts is an ongoing challenge for most businesses, particularly in today’s economic environment. Services and contractual charging regimes are often complicated, difficult to understand and lack transparency. This can lead to a lack of commercial control and a loss of value

We can help you get better value from contracts and transactions with third parties.

Potential issues

• The expected benefits of your business relationship are not being realised
• Your key stakeholders are worried about whether major contracts represent value to the business and risks are controlled effectively
• You feel that, post contract, the supplier is seeking to maximise their margin
• You are finding it difficult to create and sustain trust between you and your supplier
• Functional protectionism means you are not getting the truth about cost in your supply chain

Value erosion over time

Scope creep, delivery and quality failures, poor or perverse incentives, bad planning and demand management, ill-informed buying, deliberate contract manipulation and miscommunication can all be causes of value erosion.

How we can support you

We can help you get better value from contracts and transactions with third parties by:

• Helping you to understand the real cost drivers and true cost implications of management decisions
• Implementing effective contract deployment – you signed a great deal but is the business really getting the benefit?
• Focusing Purchase to Pay processes and controls on cost control and savings realisation
• Reviewing contract structures to ensure reward and pricing mechanisms fit the service or product and are driving the right behaviour
• Improving operational efficiency and tighter demand management through enhancing delivery at lower cost
• Simplifying by removing unreliable evidence, inadequate knowledge or unnecessary complexity that may hamper decision making
• Billing compliance and invoice error recovery

Services

By understanding the commercial implications of your day-to-day transactions we can develop a clear picture of what is happening in your business, how effective commercial processes and controls are, and how contracts and services are being operated.  

Our four-phase approach helps you understand and validate your value drivers through:

Value tracking - understand the real procurement decisions and drivers; determine and identify key elements of value; link value delivered to charges or link economic value inflows to outflows; and assess contract strategy, charge regime and product or service congruity

Assessment of processes and decisions - commercial, operational and financial aspects

Spend audits - analytical review of invoices, job sheets, timesheets and source documents

Contract compliance - review of whether contract and billing terms are being complied with

We then identify where value is being lost and provide pragmatic advice on how to you can capture value and savings.