What is this?
On the customer side, this includes:
- Understanding how the supplier or partner should be paid in order to optimise risk transfer, by modelling the payment and performance mechanisms of the proposed contract.
- Deciding whether it is better to outsource certain activities or keep them in house, by modelling the cost of the contract and retained costs and comparing them to an in-house comparator cost projection.
- Financial and value-for-money evaluation of bids.
On the supplier side, this includes modelling to inform pricing strategy for new products - understanding risks and opportunities to revenue.
The result?
On the customer side, the right activities are outsourced, and the contract is set up appropriately to maximise value for money.
On the supplier side, the pricing structure delivers the required revenue, within an acceptable range of risk.
Recent track record:
- At a fibre infrastructure
business, I simplified and rebuilt a significant commercial model to inform negotiations with potential key strategic partners. This included a clear analysis of the value of each of the key commercial levers, which dynamically updated as other assumptions changed.
- I was the commercial financial modelling specialist for contract negotiations with a key supplier of a publicly owned company. This included modelling of pricing, the full P&L, and hedging methods to manage the organisation’s exposure to variable interest rates.
- At a fintech start-up, I built simplified models (revenue and cost of sales only) at a customer/ opportunity level, which allows Sales to try different pricing strategies for brand-new products and inform their discussions with potential customers.
- At a fibre infrastructure
business, I designed and built a customer cohort pricing and revenue model, to inform decisions on exactly how to achieve the revenue projections (through product, pricing, discounts, contract duration etc), not just what the revenue projections would be based on average revenue per user assumptions.