Most organisations pay different suppliers different prices for the same thing. The best rate in your own portfolio is the most credible benchmark you have. Here is how to find it fairly.
Benchmarks from outside your organisation are easy to argue with. Every supplier can explain why their price is different from an industry average. A price you already pay is harder to dismiss.
That is the idea behind price parity: comparing what you pay different suppliers for the same thing, across your own contracts. A senior consultant at €116 an hour from one firm and €92 from another is a negotiating position, not just a data point.
Why the gaps exist
Contracts are negotiated at different times, by different people, in different parts of the organisation. One team pushed hard; another was in a hurry. Prices then drift apart further as each contract’s own increases apply year after year. Nobody sees the difference because nobody has the rate cards side by side.
Comparing fairly
The comparison is only useful if it stands up when a supplier challenges it. That means comparing like with like:
- The same unit. A day rate and an hourly rate need converting, and so do monthly and annual fees.
- The same currency, at a sensible exchange rate.
- Today’s price, with the contract’s increases applied, not the price on the day it was signed.
- The same scope. Seniority, service levels, location and volume tiers can all justify a difference.
- Fees that stand alone. A flat fee for a bundle can’t be compared with a single item’s price.
Using it
A parity gap is most valuable just before a renewal, when the supplier has a reason to listen. Bring the lower rate, show that the scope is comparable, and ask for the difference. Even when the answer is a partial move, the gap across a year’s volume is often larger than anything a general benchmark would have won.
It works in the other direction too: where you pay one supplier much less than another, it is worth checking the cheaper contract delivers what you need before consolidating onto it.
Juritas pairs like-for-like items across your contracts, converts units and currencies, applies each contract’s agreed increases, and shows the difference per unit and per year.