Hide the Ball: How Bundled Deals Are Costing Your Company

Christian Ries

Chief Operating Officer | Legal Affairs

One of the most common problems faced by strategic sourcing departments today are co-mingled or bundled deals. While they certainly have benefits, such as the ability to aggregate volume from different departments and leverage the economies of scale within your own organization, bundled deals can pose significant management challenges.

The biggest challenge with bundled deals is that they often contain many line items for different products or services and also different units of measure for the same products and services. This criss-cross overlap can make benchmarking and proposal assessment a headache. If this sounds abstract, here’s an analogy: let’s say that go to a deli to order a sandwich. The store is running a 50% discount on sub sandwiches if you buy a bag of chips, but when you get to the register you find that the bag of chips you have selected has gone from $1.00 to $18.00. By secretly increasing the price of chips, the deli has more than compensated themselves for the cost of the entire discount, and meanwhile you have wound up pretty far on the losing end of a lunch deal.

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What you thought was a deal or discount turned out to be a cheap bait-and-switch.  Similar to this, bundled deals usually require multiple layers of communication with different stakeholders. This multi-layered communication can lead to a lot of difficulty in keeping your data points straight. Bundled deals in large organizations often have cost increases in one area that end up getting offset by another. Suppliers are well aware of this dynamic, and use bundled deals to play a game of “hide the ball” in almost every industry imaginable. This is frustrating for buyers because it is almost impossible to make sure the savings you captured aren’t being hidden elsewhere. So what’s the solution?

We can help you de-mystify bundles and achieve the savings your company is seeking.
— Christian Ries

Solution One: Don’t do bundled deals. Separate these bundled deals into individual opportunities. This process, while very effective, presents its own unique challenges including lengthening the process to close diminishing the likelihood of savings, since the contract value of each opportunity is less than the sum in a bundled deal.

Solution Two: Use Bid Ops Procurement Automation Cloud. The Bid Ops Procurement Automation Cloud is designed to solve this problem, and to fully automate the analysis and tabulation legwork associated with this type of negotiation. Bid Ops Procurement Automation Cloud assures bid transparency, accuracy in bid tabulation and an assurance that the deal presented is beneficial and at the best total cost of ownership to your organization. We can help you de-mystify bundles and achieve the savings your company is seeking.

If you are interested in trying Bid Ops Procurement Automation Cloud risk-free for 30 days, please contact hello@bidops.com for additional information.