ERP Package Selection & Negotiation


Situation

To enable the achievement of long-term growth targets and strategic business goals, a leading manufacturer of life sciences and clinical diagnostics products decided to implement a new ERP platform. But given the urgency of several key organizational objectives and a range of competing business challenges, the selection and evaluation of the ERP vendor was unlikely to receive an optimal level of organizational focus. Other challenges included:

  • Lack of visibility into sourcing and evaluation best practices, relevant ERP market trends and supplier intelligence
  • Limited experience and expertise in the Tier 1 enterprise software market, including little awareness of ERP vendors’ business practices, pricing and purchasing models, negotiating strategies and deal constructs
  • Insufficient resources to lead and conduct the RFP process, vendor evaluation and selection, and contract negotiation

Action

UpperEdge provided full support to the RFP, evaluation, selection, and negotiation process, providing key guidance and information at every step. Specifically, UpperEdge:

  • Developed a sourcing plan and negotiation strategy, which included a detailed timeline of tasks and activities to ensure efficient and effective execution
  • Provided a robust RFP and commercial term sheets to clarify and articulate the company’s expectations, as well as solicit complete and meaningful proposal submissions
  • Reviewed and provided detailed analysis of all RFP responses and initial proposals, streamlining the decision-making process
  • Presented precise and relevant benchmarks for all legal, business, and commercial terms and conditions
  • Fully briefed and prepared company representatives for all interactions with vendors, including initial presentations, product demonstrations, executive meetings, negotiations, and agreement drafting

Results

By relying on UpperEdge, the company chose the right vendor for its needs and crafted a unique, tailored contract aligned to its core objectives and IT requirements. Further, it realized a number of tangible benefits, including:

  • Total savings of $7 million, representing a significant double-digit return on the company’s investment with UpperEdge
  • Validated best-in-class discount on all products and solutions
  • Contract flexibility including significant “headroom” to increase the number of licensed users and products before incurring additional license and support fees
  • Limited downstream cost risk due to caps on future support fee increases – including no increases for the first six years of the contract
  • Highly flexible pricing model with highly competitive discounts on future product purchases built into the full contract lifecycle