NXT: What services does HBR provide?
HBR’s Third Party Expense and Risk Management solutions unlock G&A vendor savings while mitigating risk, by leveraging our resources and expertise that are unavailable to any single organization.
We’re managing more than $7 billion in client-spend, and we have developed proprietary technology, processes, and analytics to make sure our clients are getting consistently the lowest prices possible.
NXT: But don’t procurement departments already negotiate the best rates possible?
Based on our experience working with clients with $300 million to $10 billion in annual revenue, we know that most companies believe they are getting the best rates from vendors across all industry verticals (e.g., AT&T, Staples, Xerox, FedEx, Cisco, Dell, etc.). In fact, account managers for these vendors will confirm that they are indeed receiving the best pricing possible.
In reality though, they are not! The simple reason is that most account managers have minimal insight into industry-wide pricing intelligence, and limited market leverage.
Typically, corporate procurement teams do not have the resources, time or real-time vendor market intelligence required to negotiate optimal terms and conditions. HBR sets the standard for expense management best practices providing clients sustainable recurring savings.
NXT: What results can you deliver?
We typically generate annual savings of $2-6 million for clients with revenues of $1 billion. Our process starts with a complimentary, no-obligation savings diagnostic that requires approximately three hours of the client’s support-staff time. The outcome of this assessment provides the c-suite with actionable insights into specific opportunities to cut costs.
NXT: Sounds pretty compelling… do you get pushback from clients?
Yes, sometimes we do. Occasionally clients believe they have their administrative expense spend under control. They often say “we addressed this internally two years ago” or “we put someone in charge of managing this area.” But the most common response is “we’re working on it.”
When we probe, we discover that these clients have been “working on it” for some time and there’s no end date or specific deliverable on the horizon. Typically, these clients lack access to vendor tradecraft, have minimal market leverage, and do not have vendor relationships at the highest levels. While small concessions may be generated, significant seven figure savings are missed.
NXT: And for those clients that go through the savings diagnostic, what’s holding them back from entering into an engagement?
At that point, more than 90% of potential clients agree to move forward. So, we are talking about a small percentage that hesitate. In these rare cases, other corporate initiatives take priority temporarily or the client’s procurement team’s ego is involved.
We are occasionally viewed as the competition or a job threat. By partnering with clients, we work side-by-side as an extension of internal teams to expedite the time required to achieve significant and sustainable savings.
NXT: Could internal teams actually do your job?
No, not as effectively as we can. Some organizations attempt to actively manage cost but our experience has shown that the results are frequently less than optimal for a variety of reasons, including:
- Limited resources (time and people)
- Lack of vendor industry expertise
- Unaware of best-in-class pricing benchmarks
- Poor visibility to internal spend patterns, trends and behaviors
- Requisite level of urgency / priority (speed to savings)
- Lack of vendor objectivity
- Inability to track and prevent savings erosion
NXT: So, let’s say a client is sold… how does it work?
After the presentation of the savings diagnostic, we enter into a formal engagement for either a two or three-year term. We present a business case strategy, which provides all vendor options and discounts. Our client then chooses which option works best for them and empowers HBR to negotiate, implement and manage the savings on their behalf for the term of the engagement.
Clients can participate in this process as much as their time permits. On average, we implement savings for each expense area in 90 to 240 days from the start of the engagement.
NXT: And how much does it all cost?
We offer two fee models: a contingent success fee or a fixed fee with a positive return for the client. Our client selects the fee model that fits their needs. Each client’s cash position is enhanced because in either scenario our fee is paid from the savings received following HBR implementation.
NXT: How do you find new clients?
It is all about warm introductions and market reputation for us. People buy from people. We consistently network and provide added value to those professionals that we meet. Many, in turn, reciprocate by making introductions to their C suite contacts. We greatly appreciate these introductions.
NXT: What has worked particularly well for you?
We recently created an introductory video, which was produced by BoardStudios.com. The animation is very charming and easy to understand. Potential clients tell us that this video is a great conversation starter. In 90 seconds, the narrative accelerates their understanding of what we do. As a result, we can hit the ground running.
NXT: It really sounds like a no-brainer…
Yes, it is. For potential clients who understand the minimal risk / high upside of our value proposition, they rhetorically ask “why wouldn’t we want to do this?”