If you’ve been following our recent blog posts, then you’re already familiar with some of the challenges we see enterprises face when it comes to managing services procurement spend. In Chris White's article, The Fix for Fixed-Fee Services on Big 4 SOWs, he talks about how TDX was able to help one Fortune-200 level tech company identify over $10M in savings within 24 hours of reviewing one Big 4 statement of work (SOW). Today, I’m excited to share more around the specific tool we recently launched, SOW Rate Insights, that provides the information needed to identify savings like these.
As procurement and category leads look to validate or negotiate rates with suppliers, they often find themselves lacking visibility into not only their own existing SOW resource rates and premiums but also insights into any type of market rates. So, if they’re reviewing an SOW pre-signature or looking to bring on a skilled resource they’ve never used before, they have no way of understanding whether the rates the supplier is proposing are ‘in-line’ with the work being delivered or if the supplier is taking advantage of them. This can result in tremendous overspend and likely strained relationships with that supplier.
With this in mind, we developed SOW Rate Insights to provide enterprises with both internal and external SOW resource rate benchmarks, so users can make informed pricing decisions to effectively source the talent they need.
Users can analyze these benchmarks by Project Role and/or Job Title and are even able to select the ‘profile’ of the supplier they’re using that will then impact the market rate displayed. For example, utilizing a Big 4 or brand name supplier results in significantly higher premiums being applied and therefore higher resource rates. At the same time, someone utilizing a mid-size supplier for operations and responsibilities of specific business functions results in lower premiums being applied and, therefore, lower resource rates. Once the supplier profile is selected, the market benchmark in this tool automatically adjusts based on pre-defined premiums stemming from Brightfield’s years of expertise and vast network of data. However, users can override the premium as necessary.
At Brightfield, we also know that there are other characteristics of an SOW or Master Services Agreement (MSA) that should betaken into consideration when analyzing rates and premiums, so SOW Rate Insights also provides a recommendation per supplier profile so that users can tap into our Brightfield expertise in this space. Armed with this information, enterprises are now able to effectively negotiate with suppliers on rates and even elements of their MSA or SOW that they hadn’t considered before.
Back to that Fortune-200 level tech org we mentioned above – utilizing this analysis and our identification of savings, they have now documented over $7M in hard savings, and that number is only continuing to grow.
Interested in seeing SOW Rate Insights for yourself and exploring other ways Brightfield can support your services procurement needs – please reach out to request a demo today! We’d love to show you!