A Four Part Executive Webinar Series Part Two:

Finding Hidden Money in Your Contract Renewals

Claire Millsap

Business Development Executive

June 13, 2012

Next Quarter: Part Three: How to build your annuity business and forecast

next year’s services

Maximizing tools to capture warranty exits and renewals

Managing the different type of services billings

Teach your clients how to provide you with actionable data that leads to new leads on

un-owned renewals.

2nd part in a 4 part series

- How to differentiate yourself from competition and lock in your clients

- Finding hidden money in your contract renewals

- How to build your annuity business and forecast next year’s services

- How to help customers write a maintenance RFP that makes sense for you

$200+ M in maintenance business currently being managed and

negotiated

70+ years experience in maintenance management across the team of

maintenance professionals

Over 1 Million dollars in development of our proactive portal

management software in the past 24 months

What MMI Does: MMI increases recurring maintenance revenue streams for IBM and their partner

community, without increasing cost, through our time tested discovery and

implementation methodologies.

BACKGROUND

Claire Millsap: Business Development Executive Since MMI Inception in 2007

Ten Years of Technology Leadership

IBM Maintenance/Warranty Expertise

Today You Will Learn How To:

Create more intelligent views of your client’s

enterprise

Design multi-year contracts that work

Leverage amortization and revenue recognition

strategies to build your company’s value

Worldwide market for technology maintenance products and services exceeds $140

billion. In the US the number is $38 billion with annual growth of 6%.

Aberdeen research on the topic of Service Revenue, showed that existing service

contracts drive 31% of overall service revenue with new contracts and warranties

making up 15% and 7%, respectively

1/3 of new products are not covered by contracts and ½ of original maintenance

contracts are not renewed.

Annual maintenance contracts contribute to 1/3 of technology OEM’s overall

revenues, generating 70%-80% of manufacturer gross margins.

80% of total annual maintenance is from channel-driven sales.

Market research show 61% of companies have no knowledge of their asset base or

used spreadsheets and rudimentary discovery tools to track the information.

FUN FACTS

Frustration with

service-call denials

Frustration dealing with

maze of personnel

OPPORTUNITY Problems reconciling

assets for compliance

Difficulty tracking

inventory

Inability to accurately

budget for maintenance

Difficulty managing

multiple services

Difficulty reconciling invoices

Lack of visibility

Into key asset data

Inability to

Mine Data

Lack of single

point of contact

Discovery

Compare and contrast their business processes with the industry best practices.

Asset and Contract Management Contacts at the Client

Target specific pain points

Review any compliance regulations

Determine a financial baseline

Review the clients current methodology and practices

Establish a Calendar of Study with targeted start and end dates.

Review Client expectations and deliverables.

Data Collection

A study of each individual contract.

A study of all items on warranty

A study of all line item detail on equipment noted as per call (exposed).

Verify the contracted, paid and/or available SW

Verify the contracted, paid and/or available SW and remotely delivered technical support

services

Integrate all financial data into the reports

Work with the client to provide additional information on their assets.

Analysis / Impact

Contract design and the impact of the to the client.

Service level options versus choices made by client and their impact.

Level of potential risk from possible exposures

Current financial implications to the organization and possible alternative options.

Measure Asset and Contract Management processes and procedures identified

through client interviews against industry best practices.

Current financial liabilities

Recommendations and Proposal

Executive Summary of Key Observations to increase recurring maintenance revenue

growth. Including:

Contract re-design that allows for contract consolidation and considerable cost cutting

opportunities.

Contract bundling options and “loopholes” that can assist the client in reducing their

maintenance costs when necessary.

Service level options for reducing cost.

Suggestions for improving Asset and Contract Management policies and procedures to

align with best practices.

Positioning Multi-Year Contracts that offer you company the opportunity to build an

annuity business and lock in future revenues

Tools for the on-going management of the inventory, contracts and financial data.

Internal Tools

Client Facing Tools

Channel Provided Tools

Increased Pipeline Management =

Higher Revenues

Net New

Renewal

Forecasting (Monthly, Quarterly,

Annually)

Addition of WSU to be added

proactively with reduced

exposures

Addition of AAS SWMA to be

added and managed proactively

with reduced exposures and ALF.

Decreased Cost of Sales Procurement

Continued Process Tuning and

Improvements

On-Going Consulting with customer

Continuing Education on New Sales

Initiatives to be added to a contracts

A MORE VALUABLE BUSINESS WITH

GUARANTEED ANNUITY REVENUES

.

Increased Company Values

Annuity Streams that show guaranteed revenue streams on a long

term basis for investors.

Decreased Liability for your company

In the unlikely event of end-user contract cancellation or bankruptcy.

Longer term retention of top sales people

With compensation packages based on recognized revenues / profits

(guaranteed income even on slower sales quarters)

Less commission exposure when sales people leave prior to a

contract end and renewal sales cycle begins.

A MORE VALUABLE BUSINESS WITH GUARANTEED ANNUITY

REVENUES

The vast capabilities of

benefit, VAR and End-User alike.

Manage warranty and maintenance end dates

Reduce cost of managing contracts

Uncover exposed equipment

Asset management (lease hardware and

software)

Rollout management

Full access to a comprehensive service and

maintenance marketplace

Data integrity and enhanced reporting

capabilities

Increase renewal and attach rates

Opportunity forecasting

Lead generation

Market and brand awareness

Industry and channel performance

visibility

Lifecycle management

Compliance management

Service call tracking

Preventative maintenance scheduling

Budget planning

Obtain competitive price quotes

Better Warranty Management of Leading US Retailer by

Technology Manufacturer: Increased Warranty Capture Rate from 81.7% to 94.3% in 6

months.

Three year warranty and maintenance contract value increased

by 300%

Streamlined Business Processes of Major US VAR: Reduced complexity and cost of delivering warranty and

maintenance agreements.

Created a 150% increase in new revenues from better

management of current contracts.

Created an on-going annuity pipeline to triple the business over

3 years.

Questions to Ask the Business

How long will it take to build the process, develop the technology and train

the people?

Is it more cost effective to buy or build this capability?

When will we see the impact of the business in revenue as well as our

bottom line if we build it alone? How long if we buy it?

What is the future of the business?

Can I scale while keeping pace with the industry?

OneView (SAAS) + Services

Developing and Building an Annuity Business

Organizing and Implementing Best Practices for an Annuity Business

Sales and Renewal Management (Contract and Warranty Management)

On-Going day to day contract management

Complete Maintenance Sales Outsourcing

How to Grow you already existing maintenance annuity business

Business Partner Augmentation and Consulting

Private Labeled Client Portal

Implementation

Initial Data Review, Scrub and Load

Help Desk

User Training & Certifications

Monthly Data Loads

Monthly Updated Data Reviews

Question and Answer Session

Next Quarter’s Webinar: Part Three: How to build your annuity business and forecast

next year’s services

Contact us at:

cmillsap@managedmaint.com