Case Study: Large Full-Service Public Utility Company achieves cost transparency and optimized supplier negotiations with GEP's should-cost modeling

Utility Company Gains Cost Transparency and Optimizes Negotiations With Should-Cost Modeling

A full-service public utility providing electric, water, wastewater and natural gas services—with seven divisions, 379 units and nearly 1,000 suppliers—struggled to see true costs across complex operations. The client lacked visibility into the cost drivers of utility-scale transformers (three variants), leaving it at a disadvantage in supplier negotiations and limiting its ability to identify savings during a broader digital transformation.

GEP conducted extensive secondary research and supplier consultations, built more than 70 custom templates and a portal for market intelligence, and developed detailed should-cost models that compared bottom-up costs and acceptable margins to market prices. Deployed across seven divisions for 2,300 users, the solution delivered baseline prices and tagged cost components to market indices, yielding greater cost transparency, formalized price mechanisms, improved fact-based negotiations, identifiable sourcing savings and clearer supplier-selection insights—ultimately strengthening bargaining power and enabling more data-driven sourcing decisions.