Comprehensive industry research shows that company executives cite the ability to rein in spending as critical to competitiveness, especially in lean economic times. The same research finds that t he annual telecom service spend revenue of an average Fortune 500 company was 8.4% of revenue. With the complexity of the services, savings opportunities and skills required to manage that spend, telecom management outsourcing is taking on the attributes of a mega trend.
The question becomes what is a fair and reasonable approach to pricing for that outsourcing, or, conversely, how can the enterprise manager make sure he or she is reining in that outsourcing spending as well?
Telecom outsourcing buyers guides help identify and assess various approaches to pricing, including:
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Contingency - - generally applied to savings and audit initiatives, as a percentage of savings found. Recently, some assessors have begun to cast contingency in a poorer light, implying a disconnect between vendor and client interests. |
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Hourly Fee - - frequently applied to labor intensive processing or high skilled consulting. Many are coupled with a fixed element which adds a budgeting control appeal. |
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Technology License Fees - - often as a combination of one time set up fees and ongoing fees triggered by pre agreed variables (spend volume, number/variety of invoices, etc.). |
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Project or Scope Fees - - based on a scope of work or anticipated transaction volume schedule, these “cap” costs as long as the work and deliverables remain within the negotiated assumptions. |
To further complicate the pricing environment, many of these may be equipped with “guarantees” such as :
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Money back guarantee (or at least a return of fees which exceed savings) |
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30 day out guarantee |
All of this makes the buyer’s outsourcing decision almost as complex as the problem being outsourced. How does one guess which will be the best vendor, and which will be that vendor’s best pricing scheme?
NRG builds our value proposition around a few key points.
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Long term “partnering” relationships are better than “vendor” transactions of a commodity nature. |
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Our culture values being “easy to do business with” |
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You should enjoy maximum value and satisfaction from the business you do with us. |
NRGunderstands what you have always known. Clients are best served by a focus on the value, rather than the price.
NRG's services can be grouped under the headings of
- Audit and cost reduction
- Management of Telecom Services (e.g., invoices, moves and changes, trouble management, etc.)
- Consulting
Each of these has its place in a long term partnering relationship, and together we can determine the exchange of values. Generally, we feel that:
- Audit and cost reduction works best under a shared risk , shared reward contingency arrangement and serves best as a set up/clean up phase for the continuing management. Under these arrangements, projects are self funding, and produce rather than drain cash flow for the client.
- The long term service of Telecom Managed Services lends itself to careful definition of the services to be provided, and establishment of the metrics by which the value of those services will be validated. Incorporated into this value model is the regular feedback which ensures the results are being achieved, the relationship’s continuation is warranted and the price paid meets the client’s own tests for a good purchase. Once done, the best pricing approach is a budgetary model which produces predictable fee or retainer levels.
- Consulting requires the most care to ensure satisfaction with value and results. For the most part, NRG prefers to define and deliver results at a fee which represents the client’s view of value - - rather than “selling” hours at whatever price the market will bear. Our consulting projects are characterized by careful pre-definition of the scope of work and expected results, and mutually agreed value pricing for those results.
NRG's service series and value pricing approach creates a compelling value proposition which clients respond to.
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