Procurement Approach To Sole-Source Vendor In Monopolistic Market

One of the largest biotechnology companies in the world needed to quickly develop a strategic supply agreement with a sole-source supplier before impending contract expiration. With no existing category manager or in-house expertise, and little time for execution, they were looking for a specialist who could identify opportunities for value, develop the sourcing strategy, and help them implement a long-term supply agreement that would lock in the value. They turned to OnDemand Professional Network member Art Brunton. CHALLENGE The sole-source nature of secondary data made it nearly impossible for the client to avoid significant annual price increases. They also had little control over the assurance of supply, quality and service of the data. In addition, all of the industry competitors procured the same data sets, so the competition for the supplier’s performance was extraordinary. Proprietary data types – the supplier was sole-source because they owned data technology and supply sources that no other supplier could offer or penetrate. For nearly 30 years, the main barriers to entry for additional suppliers were technology, cost of entry, and access to data sources. There was no potential alternative to the supplier on the horizon either.Data set obsolescence and rationalization – the client did not have a grasp on the data sets they were purchasing on a regular basis versus what was actually needed. Therefore, potential obsolescence and rationalization were not clear.Fragmentation in spend across the client’s organization – the client had numerous groups within its US organization buying other products and services from the supplier. It also had many other business partners globally buying the same secondary data sets. However, consolidation of spend was not occurring...