Client Background
A global automotive manufacturer operating in more than 100 countries was preparing to renew a long-standing managed services partnership covering all towers of Infrastructure & Operations and Application Managed Services.
The relationship had spanned 13 years. Delivery was steady and dependable, but the commercial structure had not kept pace with the market. Resource pricing, productivity expectations, and contract terms reflected a different era. For a company of this scale, even small inefficiencies carried meaningful financial consequences.
Leadership understood this renewal was more than a routine extension. It was an opportunity to reset the relationship for the next phase of growth. Minor adjustments would not be enough.
The Challenge
Over time, rates gradually drifted above market levels. Productivity improvements no longer matched competitive benchmarks. Discount structures were not fully optimized. At the same time, the organization needed to bring eight service towers back to baseline, reduce certain areas of scope, and introduce new scope across AMS and IMS.
The mandate was clear: use the early renewal to secure meaningful economic improvement while strengthening flexibility, accountability, and governance for the next six years.
UpperEdge’s Approach
UpperEdge began with a comprehensive review of the existing Master Services Agreement and supporting statements of work. The team analyzed pricing structures, productivity commitments, and contract mechanics to identify gaps and areas for improvement. Benchmarking confirmed that Infrastructure resource rates were materially above current market levels.
Through a disciplined negotiation process spanning more than 15 proposal iterations, UpperEdge helped the client reset the economics of the agreement. The result was an average 20 percent reduction in Infrastructure resource rates, along with best-in-class productivity commitments across AMS and Security.
At the same time, the contract framework was strengthened to provide greater visibility and control. The renewal introduced enhanced volume discounting, a committed annual discount, improved change order protections, caps on rate increases, stronger SLA accountability, and clearly defined termination rights at the tower level.
The Results
The organization secured $53.8M million in total savings over the six-year term.
Current scope savings totaled $16.6 million, reducing run-rate costs by 23%. Newly introduced scope was negotiated at a 46% reduction from prior proposals, generating an additional $1.1 million in savings. Structured discounts contributed more than $2 million in incremental value.
In Year 1 alone, savings reached almost $2 million, including more than $1 million driven by the 20 percent reduction in Infrastructure resource rates. Over the life of the agreement, $16.5 million in productivity improvements were secured, bringing managed services fees back in line with market expectations.
Just as important as the financial impact, the organization gained flexibility to adjust volumes within defined thresholds without penalty, improved shared accountability for service levels, and stronger governance across eight service towers.
Is Your Managed Services Renewal Positioned for Market Value?
If your Managed Services agreement is approaching renewal, this is the moment to assess competitiveness and realign your commercial structure with today’s market.
UpperEdge works alongside enterprise IT and procurement leaders to benchmark pricing, renegotiate productivity commitments, strengthen contract protections, and secure measurable savings that hold over time.
Before you renew, ensure your contract reflects today’s market realities.