An Insurance Industry Fortune 200 company and PRP have an established eight-year relationship. To date, PRP has been engaged to evaluate and improve cost management performance in multiple administrative expense categories. Total realized savings to the client over the course of our relationship exceeds $100 million.

Company Profile

• Centralized management structure
• Operate under national contracts
• Organization is comprised of 200 separate divisions; 1700 office locations
• Over 200 separate billing centers
• Roughly 50% of their business entities participated in corporate programs
• Each division is treated as a profit center, and is held responsible for P/L performance
• Generating profit is one of the client's key objectives and their number one priority
• Client has experienced phenomenal growth, with revenues having expanded to almost $10 billion from $700 million over the last nine years

PRP Process/Strategy
PRP staff analysts visited each of the client's 200 separate divisional locations in order to guarantee the thorough evaluation of existing expenses, and to more effectively manage the introduction, implementation and monitoring of the tailored savings programs. As part of PRP's term-of-service engagement, analysts maintain responsibility for the accurate tracking and verification of resultant organization-wide savings.

In addition to preferred pricing structures, PRP negotiated modifications to contracts making vendors accountable for higher service standards and performance and more thorough coverage of divisional services needs.

Improved communications performance related to divisional awareness of corporate programs, and the multi-lateral exchange of information within and between Corporate/Division functions to maximize the effectiveness of centralized decision-making.

PRP understands that the implementation of new methodologies and systems can have an impact on an organization's culture and climate. In making the commitment to deliver clients promised results, we are always careful to take into consideration the needs of those who experience the changes associated with such implementations. Contrary to the "install and run" techniques generally practiced by our competitors, PRP invested in the client's human resources and relationships through:

• formal training courses conducted for purchasing staffs focusing on industry philosophies, strategies and tactics and the art of negotiating
• cost-reduction seminars provided as a service to client's customers
• attention to and support for all divisional service requirements and issues

As an integral part of our service, PRP made every effort to discover new opportunities for reductions throughout the client's enterprise, and made sure to educate the client as to the potential benefits of implementing additional cost-savings programs in new or existing areas of administrative expense.

Results

• Improved internal contract compliancy rates from 50% to 95%
• Achieved between 25-35% rate reductions on all National Account programs
• Negotiated the initial SBC nationwide pricing schedule superceding the less efficient 11 independent (by state) service agreements
• Assisted with the conversion of all new acquisitions to the national program, achieving lower local costs within 90 days of purchase
• Eight-year realized savings exceeding $100 million

The following micro-case describes in greater detail the process and results of PRP's executed efforts in just one of the major expense categories in which PRP has provided services for this and other clients.


Challenge
A client acquisition necessitated an integration of the new organization's existing telecom contracts into their corporate portfolio. Of primary urgency for the client, was the migration of voice and data lines without disruption of services.

Objectives

• Identify all contracts that could be either terminated or rolled into the client's existing vendor contract portfolio
• Negotiate the termination of existing contracts without incurring penalty charges
• Identify duplicate, over-subscribed and non-usage services and execute the termination of services without incurring penalties
• Renegotiate with any third-party vendors to maximize cost savings

PRP Process/Strategy
After capturing all invoices, contracts and supporting documentation associated with the acquisition's telecom services and providers, organize through proprietary templates and assess potential opportunities to migrate "like services" to existing corporate contracts. Utilize established internal negotiating methodologies and processes to identify and eliminate to every extent possible any termination penalties and arrange for the alignment of continued service-term durations.

Results
All telecom services were successfully migrated without disruption, and negotiated without financial penalties of any kind to client. Savings to the client as a direct result of the effective consolidation of providers/carriers amounted to over $120,000 annually.


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