Palambridge

We’ve got to give you credit…

Written by Philip Ideson

In the week since we launched Palambridge, I have been very encouraged by the way our ecosystem-driven model has been received.

The one question I have received more than any other is about our credit based commercial model.

We currently offer two different models:

  • Project-based engagement
  • Monthly credits based managed service

Let me share the context behind our thinking as we developed our engagement models:

Project Basis

This is the traditional consulting firm engagement model.  A client has a specific project that requires support, and a fixed scope of work.  Palambridge will support these clients with project based pricing (no credits needed).  While the power of our ecosystem is a differentiator – the commercial model is traditional.

Credits Based Managed Service

This is a more disruptive approach, and provides short term access to subject matter expertise through our credits-based model.

Clients buy a number of credits per month for a defined period of time (e.g. 6 months, 12 months).  Think of these credits as the currency within the Palambridge platform.  These credits can then be exchanged for deliverables as defined on our pricing menu. For example:

  • Sourcing strategy: 25 credits
  • Negotiation strategy: 20 credits
  • Contracting strategy: 15 credits
  • Contract redline review: 12 credits
  • Sourcing mentor package (all the above): 65 credits
  • Sourcing project execution: credits to be determined based on project complexity

Additional services and deliverables can also be added to each client’s package so that it is scoped to meet the minimum requirements per month.  For example:

  • Monthly account management and proactive pipeline development: 25 credits (illustrative purposes only, actual credits will determine on size of client engagement).
  • Use of eRFP tool: 5 credits per event.

Let’s say a client believes their minimum requirement every month is a single sourcing mentor package.  Their minimum need is therefore 65 credits per month, and they would commit to buying 65 credits per month for a fixed period of time?.

Another client may anticipate a minimum of 5 sourcing mentor packages per month along with proactive account management.  They would commit to buying 350 credits per month.  

The only difference for each client is that price they pay per credit.  The higher the number of credits that a client commits to, the lower their price per credit.  That price then applies for any additional credits the client decides to add.  If a client ends up using less credits in a month than they have access to, those credits roll over and can be used at any time over the duration of the contract.

Why Build a Credits-Based Model?

The credits model is built to enable clients to harness the depth and breadth of our virtual procurement platform to access the subject matter expertise they need, when they need it – but in a way that considerably limits their financial risk.

This model enables Palambridge to build long term relationships with our client.  This is important! It allows us to proactively align client needs with the capabilities of our ecosystem.  

Frankly, it also provides a level of client commitment, allowing us to invest in the resources necessary to seamlessly deliver services from across our platform – taking into account the micro-consulting model that applies to a number of the deliverables that will be provided under this model.

From a client perspective, the model requires a minimum commitment that aligns with their planned minimum usage.  No more paying for unused services. No more paying for unnecessary bundled services. No more signing long term contracts.

In summary: While certain solutions can be provided on a project basis, the credits model underpins our on-demand delivery model.

Clients can buy deliverables from our pricing menu as well as for project-specific work.  

Clients who apply credits towards the price of customized project will benefit from flexibility as well as the kind of resource efficiency procurement is accustomed to demanding of other service partners.

We anticipate our credits model to mature over time, with more and more deliverables added to the menu as we determine our cost to deliver complex projects.

We believe that delivering services in a new way requires a new commercial model. If you are interested in learning more, or have additional questions, do not hesitate to drop me a line at pideson@palambrige.com

About the author

Philip Ideson

Philip Ideson is passionate about the role that procurement professionals and leaders can plan in creating competitive advantage for their organizations in ways that go beyond the traditional value proposition.

Philip founded Art of Procurement as a way for the procurement community to learn from each other, increasing the impact they have on their organizations. In 2017, he co-founded Palambridge, a virtual platform of procurement experts, technology, and intelligence. Palambridge provides a broad range of flexible procurement solutions, available on-demand.

Prior to Art of Procurement and Palambridge, Philip enjoyed a career that spanned the procurement value chain, working across three continents for organizations such as Accenture, Procurian, Ally Financial, Pfizer and Ford Motor Company.