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Opportunity Overview
Recent studies from EY/Harvard Law School and World Commerce & Contracting (WCC) show that companies lose anywhere from 9% to 50% of annual revenues through inadequate contracting and commercial management. Private investors, facing longer hold periods for their portfolio companies and reduced multiples, must look beyond the traditional levers to find new paths to create value and meet their target returns.
Rabin & Company offers commercial advisory services across the lifecycle of an investment to optimize commercial operations and data-driven decision making. These services maximize revenues and enhance margins through efficient, scalable, and sustainable commercial and contracting processes that reduce contracting time and friction and minimize risk.
Representative clients include Greenbriar Equity Group, L.P. and One Rock Capital Partners.
Due Diligence
Either pre-acquisition to assist in evaluating a potential investment and underwriting a contractually driven revenue stream properly, or post-acquisition to assess existing contracts, Rabin & Company offers:
Gap Analyses. Analyze the company's largest customer contracts, both existing and in the pipeline, and prepare a gap analysis against commercial and risk benchmarks to confirm alignment with financial reports and forecasts
Process Assessments. Assess the company’s commercial and contracting operations, rigor and consistency of processes, commercial governance, and alignment of sales teams with finance, operations, legal, accounting, HR, and other stakeholders
Flow Down Reviews. Review vendor subcontract templates to confirm ability to pass through cost increases and flow down other critical terms
Target Opportunities. Identify material gaps and potential revenue growth, margin expansion, and leakage reduction opportunities
Contract Process Optimization
Significant value creation occurs through optimizing a company’s contracts and ongoing commercial processes. These activities, which can occur in phases, may include any of the following:
Value Drivers. Identify commercial levers to enhance margin contribution without losing market share (e.g., fee structures, performance fees, gainshare, cost recoveries, payment terms)
Commercial Guardrails. Create or refine commercial and risk policies and guardrails for customer contracts, identifying for each issue both target and flex outcomes allowing sales team to focus on the key issues to drive margin improvement and accelerate conversion cycle; establish efficient governance process to disseminate guardrails and ensure compliance across business units
Commercial Governance Process. Assess and enhance workflows for escalation and approvals, checks and balances, and alignment of stakeholders across the contract negotiation lifecycle
Inflation & Tariff Protection. Structure and implement mechanisms for contractual price escalations and inflation mitigation strategies
Renewal Analysis. For material customer contracts, tactically identify significant commercial terms to seek to improve upon renewal
Template Enhancement. Review existing contract templates and standard clauses and recommend improvements as necessary to ensure alignment with optimization initiatives and approved guardrails
Training. Conduct periodic training of sales, legal, finance and operational teams on guardrails and best commercial practices as needed from time to time to maximize revenues and avoid leakage
Enterprise Best Practices Alignment. Harmonize and align best practices consistently across all applicable business units
Major Negotiations. As requested, assist in key customer negotiations; advise regarding escalated material commercial issues and proposed variances from guardrails to develop optimal, risk mitigated solutions
Talent Reviews. Assess talent periodically across commercial and negotiating teams and make recommendations where appropriate to drive effectiveness, accountability, and efficiency
Sales Incentives Alignment. Review sales teams'compensation metrics and incentives to ensure alignment with commercial excellence to reduce conflicts
AI/CLM Implementation. Oversee selection and implementation of an AI-driven contract lifecycle management (CLM) platform to create automated workflows and enable leading-edge data-driven analytics. Potential benefits include reducing contract processing time by over 80% (per Forrester study) to accelerate revenues
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