The Client is one of the world’s leading pharmaceutical companies providing innovative, effective medicines designed to fight disease in important areas of medical need: cancer, cardiovascular, gastrointestinal, infection, neuroscience and respiratory.

Project
The Client had a different supplier of conferencing services across its major operating countries including the UK and USA. Although not dissatisfied with the services being provided, it was clear that that there was an opportunity to improve service costs. In addition, it was decided to use this opportunity to test the marketplace and determine whether there would be commercial advantage in a single sourcing agreement. Another key driver was to encourage the use of audio conferencing across the business, thus reducing the cost of business travel.

Xantus was commissioned to help achieve this aim. Initially engaged to develop tendering documentation for issue to potential suppliers across 18 countries. Xantus was subsequently retained to manage the response evaluation process and to assist the Client’s team in determining the most suitable supplier(s) and service(s) to be taken forward to contract negotiation.

Successful supplier selection and negotiation led to improved service delivery and a reduction in costs of up to 50% in operating countries.

Approach
Xantus produced the Invitation to Tender documentation (ITT) which covered the complete range of conferencing services under the existing contracts. It was also understood that the scope had to be flexible to allow for a range of possible outcomes, and to accommodate differing requirements and issues in each of the three main countries. A major difficulty was overcome by harmonising the conference types to allow for a fair comparison of different supplier offerings. This was achieved through Xantus’ cost modelling methodology - a flexible cost model is produced to undertake testing scenarios based on supplier pricing, thus ensuring that the right tariffs are targeted for reduction to allow for maximum benefit.

Following production of the tender documentation and cost modelling, Xantus was asked to lead the tender evaluation process and to undertake a market benchmark of supplier pricing.

Xantus’ approach to the project was as follows:

• Calculation of the annual call minutes generated across three continents and the associated annual spend
• Estimation of the annual call minutes likely to be generated for each of the other operating countries
• Xantus' Consultants worked closely with key staff in each of the core regions to gather information and detailed requirements for the ITT
• Xantus worked closely with the Client’s procurement specialists to develop the templates to be used during the on-line auction and evaluated the results
• Xantus facilitated the selected suppliers’ presentations
• Xantus managed the ITT evaluation, structuring the analysis and managing the clarification process with the suppliers to a point where the Client was happy to move to contract negotiation

The Benefits
Throughout this project the Client benefited from Xantus’ detailed procurement expertise and our flexible approach; allowing the tendering process to be adapted to accommodate the differing needs of the business locations.

Xantus’ expert market and technical knowledge of telecoms services allowed a comprehensive ITT to be developed and effective benchmarking of supplier proposals, against each other and the conferencing marketplace as a whole.

The Client was able to negotiate a reduction in the overall cost of service with incumbent suppliers of up to 50% (although the percentages in each country varied) as a result of this project.

In addition, Xantus’ independence gave the project credibility across the three main operating countries.

Feedback
The client valued the independence of the process and Xantus’ ability to drive the project forward - while directing their time and attention to the key areas.

More Information
For more information please contact Catherine Sanders at Xantus on 0161 495 2330 or email catherine.sanders@xantus.co.uk