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06 Apr 2007 | Viewed 344 times

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The top ten threats contract re-letting poses for service providers

Author: Morgan Chambers

Morgan Chambers' benchmarks reveal that as the market has evolved over the last few years, contracts which have been in place for longer than five years now show unit and fixed pricing higher than market averages. Primarily this is because investment programmes, cost and staff reduction opportunities and other service improvement programmes have not been driven as aggressively over the lifetime of the contract. This isn't always the fault of the provider however; service quality pressures, lack of investment and resistance to change from the client may prevent the supplier from implementing the change programme. The result is a high base cost which is often out of kilter with the market. As a provider you must always seek ways in which to reduce the costs of these contracts to remain competitive, while protecting margin and profit to enable continued investment in your business. If as the incumbent supplier you fail to do this for your clients, you will be giving other providers the opportunity to win new business - business that could have been yours!

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