Using a Third-Party Procurement Provider to Spur Negotiation Success
I see this time and time again: when people bring a third-party procurement and strategic sourcing company (like K2 Sourcing) into a negotiation, they receive 5% to 20% more savings, increase qualitative value adds, and improve the relationship. At least when firms do this correctly. We have seen this in direct materials, indirect materials, and service agreements.
Over the last 3 weeks, we were brought into multiple software contract negotiations at the last minute and were able to achieve savings of 15% to, believe it or not, 60%. This is with companies that stated they already negotiated the agreement, and we can verify they have good procurement people in place.
When a third party is used, I think it presents an aura and clear intention that you are elevating the negotiation process. I also enjoy how a third party can be used to protect your relationship.