Case Study
Contract Fusion: Optimizing Vendor Relationships at a Merged Technology Company
FTI Technology helped a newly combined technology company maximize value in its vendor contract portfolio, saving millions of dollars, and solidifying operations as the companies integrated.
Situation
A top-tier private equity fund acquired two businesses to form a new technology company worth billions of dollars. As the dust settled on the deal, it was clear that the combined company needed help optimizing its combined vendor contract portfolio, which included similar contracts across both businesses. FTI Technology’s Contract Solutions team was engaged to find synergies across the entire population of contracts and maximize value for the new entity.
Our Role
FTI Technology’s contract solutions experts reviewed agreements with 600 vendors, analyzing terms and projected spend data relating to them. The team also engaged finance and procurement stakeholders at the company to understand the course of performance with each supplier and the market dynamics for products and services. With this information, FTI Technology created “baseball cards” for each vendor, giving a clear picture of the realities of the commercial relationship, expected costs and value associated with each contract.
Additionally, the team provided recommendations for handling each contract to drive and optimize business value. Highlights included contracts suitable for termination, including instances of multiple contracts for the same product or service and contracts with particularly unfavorable terms for the business. FTI Technology team flagged opportunities for contract consolidation (e.g., contracts across different products but with the same supplier) or renegotiations (e.g., contracts with ”most favored customer” provisions that could be used to reduce pricing based on benchmarks. Any key contracts that were approaching renewal were identified for extension to maintain operations without business disruption.
Our Impact
FTI Technology’s Contract Solutions offerings enabled the client to make strategic decisions based on contract terms, allowing the company to maximize value across its contract portfolio.
The project saved millions of dollars by eliminating hundreds of contracts that lacked value for the newly formed company and enabling avoidance of payments for contracts under a transition services agreement.
FTI Technology’s experts also helped the company solidify contracts with operationally critical vendors, preventing gaps in coverage during contract expirations.