Cost Optimization And Price Reset

The sourcing landscape has shifted, and buyers now have the upper hand

Margins are compressing. Providers are cutting deeper. Across sectors, sourcing leaders are quietly negotiating record-level savings. This is not a hypothetical scenario — the pricing reset is already happening.

In Everest Group deal reviews, providers have reduced pricing by 35 to 40 percent between RFP and contract. We’ve seen sign-on bonuses, relaxed payment terms, and deal structures that shift risk to the supplier. If your contracts have not been pressure-tested recently, you may be leaving serious value on the table.

Unlock real commercial advantage

Providers are making major concessions

Substantial rate reductions, performance-linked models, and bundled automation are becoming standard among well-informed buyers.
Savings opportunities are real and measurable
Recent Everest Group client outcomes include:
- 35 to 40 percent reductions between the initial proposal and the final contract
- 20 to 30 percent savings in year one, with 65 percent or more over five years
- Bonus incentives, flexible payment terms, and automation delivered without added cost
Cost take-out fuels transformation

These savings are freeing up cash that can be redirected to innovation and strategic priorities

What’s getting in the way of better deals?

Even in a buyer’s market, some organizations are missing out:

Relying on outdated sourcing models focused only on rate negotiations
Failing to leverage AI-driven changes in service delivery
Holding onto contracts that do not support performance outcomes or automation
Missing peer benchmarks and provider concessions that are already on the table

Restructure your deals and capture more value

This is not about overhauling your strategy. It is about updating how you approach deal commercials:

Frame deals around outcomes, not just FTEs
Shift to managed services with embedded automation
Use benchmarks to pressure-test top deals
Identify two or three actionable savings levers in one short conversation

Is it time to revisit your top provider contracts?

The opportunity is real, but it will not last forever.

Providers are still making significant concessions, especially when faced with informed, strategic buyers. If you have renewals or new sourcing initiatives coming up, now is the right time to act.