finding hidden money in your contract renewals
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DESCRIPTIONMMI's Claire Millsap discusses ways to find Hidden Money In Your Contract Renewals.
A Four Part Executive Webinar Series Part Two:
Finding Hidden Money in Your Contract Renewals
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
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
70+ years experience in maintenance management across the team of
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
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
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.
Frustration dealing with
maze of personnel
OPPORTUNITY Problems reconciling
assets for compliance
Inability to accurately
budget for maintenance
Difficulty reconciling invoices
Lack of visibility
Into key asset data
Lack of single
point of contact
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.
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
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
Contract re-design that allows for contract consolidation and considerable cost cutting
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.
Client Facing Tools
Channel Provided Tools
Increased Pipeline Management =
Forecasting (Monthly, Quarterly,
Addition of WSU to be added
proactively with reduced
Addition of AAS SWMA to be
added and managed proactively
with reduced exposures and ALF.
Decreased Cost of Sales Procurement
Continued Process Tuning and
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
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
Full access to a comprehensive service and
Data integrity and enhanced reporting
Increase renewal and attach rates
Market and brand awareness
Industry and channel performance
Service call tracking
Preventative maintenance scheduling
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
Three year warranty and maintenance contract value increased
Streamlined Business Processes of Major US VAR: Reduced complexity and cost of delivering warranty and
Created a 150% increase in new revenues from better
management of current contracts.
Created an on-going annuity pipeline to triple the business over
Questions to Ask the Business
How long will it take to build the process, develop the technology and train
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
Initial Data Review, Scrub and Load
User Training & Certifications
Monthly Data Loads
Monthly Updated Data Reviews