Enterprise Redesign

Redesigning Value Capture to Plug Margin Leakage

Rebuilding how a business charged, after it had changed what it sold — inside a global enterprise managed-services line.

The Situation

The business had gone contractual. It was selling long-term managed services, and customers were buying them. Margin on large deals had dropped 150 to 200 basis points and was still slipping. Every renewal opened as a fight over price. Contracts closed short, most under eighteen months against a three-year norm. On the desk, every explanation was about behavior — reps discount too hard, they need to sell value better, the deal desk needs tighter approvals. It looked like a discounting problem. It wasn't.

What Had Actually Changed

The business had changed what it sold — long-term service contracts, not one-off deals — but it still priced the old way, building every price from scratch, deal by deal. That mismatch was the whole problem. Prices were per-seat and per-device, capturing little of the real value. Nothing was packaged, so every deal was rebuilt and re-argued. The contract couldn't hold value over time, and expansion had no home in it at all. One cause sat under every symptom.

The Rebuild

The pricing itself was rebuilt. It became modular, packaged into capability tiers — each tier bundling the software, services, and devices to match, priced to how much the customer needed and how critical the work was, with a published price so they could see what they were paying for and pick the tier they wanted. It was priced for the longer term, with future add-ons priced up front, so growth inside a contract was already agreed — and margin came from expansion instead of leaking away in it. And it was open. The business read showing its prices as giving away pricing power. I saw it the other way: hiding the price was the leak, because a customer who can't see the value just argues about the number. Open prices gave the customer an informed choice, and took away the reason to negotiate at all.

The Outcome

The first two deals closed near the old margin, and the voices to pull back grew loud. I held the redesign in place until the third deal proved what it was built to prove. Customers stopped pushing on price and started weighing fit. Margin recovered fully within about eighteen months and finished 50 basis points above where it had started. Short contracts fell from most of the base to under a third, terms lengthened, and the revenue base moved from shrinking to growing. Built once, the same structure then held at the partner-led route too.

Kept short on purpose. The longer version holds the harder part — the tensions, the trade-offs, and what fought back. Where it maps to something you're facing, I'll share the full account or walk you through it.