MID-TERM CONTRACT

ALIGNMENT SERVICES

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Clients find that their existing contracts have fallen out of alignment with their strategic direction, market conditions, risk tolerance, or other dimensions.

The Contract Alignment service works with your existing providers to remedy these gaps mid-contract by using RampRate’s collective buying power, and win-win trade-offs that increase value for both sides.

  • 10% - 50%+ reductions in operating expenses (average of 23.7%) OR proportionate increase in services with no incremental costs
  • Drastically reduced relationship risk
  • Remediation of critical operational / performance issues
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Improvements in customer satisfaction and better day-to-day operational processes

  • Performance improvements that can lead to revenue increase (e.g., reduced latency)
  • Transparency in pricing models, delivery commitments, contracts, and performance
  • Cost certainty for future changes such as expansions, scale-down, and termination

WHEN TO CONSIDER

CONTRACT


ALIGNMENT

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  • one_one.png Have grown and evolved
    since contract signing
  • twoo.png Are buying services in rapidly evolving markets (co-lo, cloud Computing, network, wireless, etc.)
  • threee.png Have a pending event such as growth, consolidation, acquisition, or scale-down / termination
  • fourr.png Are able to work with RampRate on aligning around a single message and rules of engagement
1 Identify what been bought, at what cost, what terms and performance.
2 Compare to market and ideal outcomes
The Process
The Contract Alignment process is composed of 6 steps:
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6Ensure that agreed-on improvements are in the final contract and project the impact in terms of savings, performance, and risk improvement.
5Use time-tested strategies for growing the pie and ensuring you get a larger slice
1
Understand what services you’re using and how much they cost
2
Compare your current state to best in class & best fit outcomes to set a target for change
Build leverage by defining the “carrots and sticks” to be used in a negotiation, and add in RampRate’s collective buying power. Map trade-offs – Work with providers to identify their wins and priorities for a true value exchange – e.g. moving away from legacy services to newer ones or giving back capacity they can resell for more.
Negotiate final deals, getting them ready for legal to sign off. Expect an avg. of 24% cost reduction across multiple towers.
5
Use time-tested strategies for growing the pie and ensuring you get a larger slice
6
Ensure that agreed-on improvements are in the final contract and project the impact in terms of savings, performance, and risk improvement.

HOW MUCH IT COSTS

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Guranteed 300%+ return on each dollar invested. It is composed of a small advance payment savings to cover internal costs which is refundable if the process is completed without a result, and a share of the savings or other return on the project.
We have never performed less than 700% so there have been no refunds in 15 years.
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Sales Cost Reduction
We’re not just better negotiators with better data – we also cut your provider’s cost of serving you so they can pass on the savings. Our process often replaces expensive multi-tier sales organizations with objective forms;
1-2 year sales cycles with 2-month closing; ill-fitting and unclear RFPs with perfectly pre-qualified opportunities; and a drawn-out legal process with pre-templated best practices contracts.

AREAS COVERED

All flavors of hosting, ranging from wholesale data centers to managed hosting and cloud
Public and private cloud computing and storage in IaaS and PaaS delivery models
Data networking, including both IP transit and data transport services such as PLC, MPLS, etc.
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Content delivery network services, including core delivery and value-added services
Telecommunication, including switched and packet-based landline and mobile
Server and desktop support services, including remote infrastructure management (RIM)
As a master contractor
working with targeted partners
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1 My contract just began / has several years to go. Can something be done for it?

Many of our most profitable engagements were mid-contract. Unlike other gainshare-based negotiators, RampRate’s Hypersource.IT platform creates reputational capital for providers and identifies adjustments that they want to make – even mid-contract.

Why would a provider give RampRate a bigger discount than they would give to me?2
We manage supplier reputations and bring them into more deals if they are pliable mid-contract. We also know sales org structures, incentive programs, and other organizational secrets that may make it more attractive to a provider to have you buy $1 of one service than $10 of a different one.
3Won’t this spoil our operational relationship with the providers?
We will not send any correspondence to a provider without your advance approval on the strategy and the messaging. That said, this is a normal course of business for all suppliers, and while they may prefer that the client not have a strong and knowledgeable advisor, they understand your need for ensuring your strategy is optimal. During the process we take on any negativity and ensure all your interactions remain positive.
I have a strong procurement department and a lot of cost savings initiatives in place already. How can I be sure this will add value?4
Our clients include some of the most efficient and effective IT and sourcing organizations worldwide. We have worked to improve their existing initiatives – e.g. reducing termination penalties so they can migrate to a cheaper solution as well as creating our own programs.
5How does the savings fee work if my usage grows / shrinks, or I add / remove services?
Our pledge is to never take credit for savings we don’t create. That’s why we calculate all savings on a unit cost basis – if you buy a widget for $1 today and for $0.80 after RampRate, you have saved $0.20 per widget and pay us a share of that $0.20 for each widget you actually buy, regardless of whether your volume grows or shrinks. Usage changes only count as savings if we identify and remove unused capacity (e.g. dormant wireless accounts)
How can you be sure that you will save me at least 3x your fees?6
Our track record of our methodology leading to consistent savings. In smaller engagements, we may also do a preliminary review to ensure that the scale of the deal and the potential savings don’t make the project less viable.

EFFECT OF RAMPRATE PROCESS ON RISK EXPOSURE

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Financial Impact Total
Baseline Spend $38,548,627
SPY index Target $28,911,470
Negotiated Spend $28,372,850
Projected Savings $10,175,776
Savings % 26%
RampRate Fees $2,253,256
Net Savings $7,922,511
Our Impact Total
New Contract Projections Added 76
Added Amt. At Risk 70%
Early Termination Penalty Reduced -85%
Net Performance Score Increase 117%
Performance vs. SPY Index
Prices
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Performance vs. SPY Index
Contract Terms
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