Baseline
The HR platform renewal arrived with a quote that assumed the status quo would carry on. It had not. Headcount had doubled since 2020, yet the per-employee rate had barely moved. The supplier proposed yearly increases or a five-year commitment, priced against a CPI figure that did not match the one defined in the current contract. The Success Plan fee rose with headcount even when the services did not, and the draft order form added cost without any change in the business.
What we did
The client’s team set the position, and S2V, as buy-side advisor, helped build the case. The team chose to hold the line on term and price, then worked through each lever in the renewal:
- Term and pricing: a three-year term with flat pricing, in place of yearly increases or a five-year lock-in.
- CPI basis: pricing corrected to the CPI figure defined in the current contract.
- Per-employee rate: a push for a lower rate, given the doubling of headcount since 2020.
- Success Plan: a challenge to a fee that scales with headcount while services stay the same.
- Headcount baseline and growth pricing: a reset employee baseline, with lower pricing for added employees and earlier growth discounts.
- Order form: draft changes reversed, so no cost was added without a change in the business.
- 2029 renewal: a request to cap the increase at the next renewal.
- Contract protections: usage credits, change of control, and enhancement request response times.
The team also pressed for dedicated help to improve the user experience for the HR team.
Implementation and adoption
The renewal landed with significant cost reductions. It also included vendor labor to enhance the current system and improve the employee experience, so part of the value returns as service for the HR team and the people who use the platform. The commercial terms now run on a 36-month term with flat pricing, which gives finance a stable number to plan against. Value was measured by comparing the new price with the incumbent’s renewal quote.
Validated result
- $531K saved over the 36-month term, or $177K a year, 6.2% below the prior cost.
- Measured as the new price against the incumbent’s renewal quote.
- Obtained significant 6 figure concession for labor to enhance the existing platform and overall employee experience.
Related
- Strategic Sourcing: S2V Accelerator
- Value Tracking: S2V Pulse
- Financial Services
- Enterprise Software Renewals