Overview
A global manufacturer’s IT infrastructure and applications managed services relationship with Infosys had grown out of date after more than a decade together. The contract structure, scope alignment, and commercial terms all needed a reset. Rather than a simple rollover, the manufacturer set out to re-baseline existing scope, trim some areas, add new scope, and secure meaningfully better pricing, commercial terms, and service levels all in a single renewal.
UpperEdge supported baseline assessments of the master agreement and statements of work, proposal solicitation development, negotiation preparation and benchmarking, and negotiation execution through contracting. The result was a 6-year renewal spanning 8 towers of managed services, including new AMS and infrastructure scope.
Challenge
A decade-plus relationship brings real risk: rates, structures, and protections that were once market-competitive tend to quietly fall behind. The manufacturer needed to:
- Reduce out-of-market resource unit rates that had drifted well above current benchmarks over the life of the prior term
- Re-baseline scope accurately (some services needed to shrink, others needed to expand) without losing negotiating leverage on either side
- Modernize a sprawling, hard-to-manage contract structure so that internal tower leads could actually own and manage their areas of the agreement
- Rebuild commercial protections (change order discipline, termination rights, service level frameworks) that had gone stale over years of amendments
Approach
UpperEdge ran a comprehensive, multi-phase renewal engagement:
- Baseline Assessments of the existing master agreement and statements of work to establish a clear, current-state cost and scope picture
- Proposal Solicitation Development to formally request improved economics and terms across all towers
- Negotiation Preparation, Proposal Analysis & Benchmarking that validated proposed resource unit rates against market data across two dozen distinct resource categories
- Negotiation Execution and Contracting, including a full contract restructuring exercise
The restructuring work was as significant as the commercial negotiation: the team converted a fragmented, exhibit-heavy legacy structure into a streamlined Managed Services SOW built around clearly owned schedules per tower, giving the manufacturer’s internal stakeholders a contract they could actually manage day to day.
Results
Deal Competitiveness: Highly Competitive
- ~27% savings over the 6-year term versus the pre-negotiation renewal baseline
- ~20% average reduction in IMS resource unit rates, delivering over $1M in year-one savings alone
- Substantial productivity improvement savings achieved across both current and new scope, with application managed services and security fees landing competitive with market
- A reinvigorated volume discount structure plus a committed flat annual discount, together worth roughly $2M over the term
- A comprehensive contract restructuring, replacing a fragmented legacy exhibit structure with a streamlined, tower-based Managed Services SOW
Commercial term improvements matched the savings in significance:
- ARC/RRC deadband tightened from 20% to 10%, with new multi-tier adjustment mechanics, giving the manufacturer cost predictability on consumption changes and reducing reliance on formal change orders
- Market-standard caps on resource rate increases (COLA), replacing a previously silent contract
- Change order guardrails, including no-cost investigations, notice-and-cure requirements, and protection against change orders triggered by the provider’s own errors or omissions
- No-cost termination for convenience by individual tower, with transparency into the provider’s own tooling investments
- Maximum SLA penalty percentage doubled, from 15% to 30%, rebalancing risk-sharing meaningfully in the manufacturer’s favor
- Expanded SLA change rights, creating a unilateral ability to modify allocation percentages, promote or demote key metrics, and adjust SLAs without triggering a full change control process
- Clearer termination rights, including defined thresholds for consecutive missed service levels and loss of at-risk fees
Organizations with IT outsourcing relationships that have run a decade or longer should treat the next renewal as an opportunity for structural reset, not just a rate conversation. Re-baselining scope, modernizing contract structure, and rebuilding commercial protections from scratch typically unlock savings, and manageability, that incremental amendments never will. Sitting on a long-tenured IT outsourcing contract that’s due for renewal? Talk to UpperEdge about a full baseline assessment and renegotiation strategy.
