The customer is a national paper and plastics manufacturer with spending of $1,350,000 annually. Over the last five years, they have acquired several of their competitors including some partial acquisitions that only included certain divisions or business units rather than entire companies. How were they able to cut their telecom expenses by 27%?
The Telecom Problem
The main challenge was the fact that much of the invoicing and services were spread among the acquired companies instead of centrally located. Collecting all the data would be an extensive project as much of the billing was shared and still in the names of previously acquired companies.
An inventory management system needed to be in place so services could be better organized, contracts could be renegotiated, and policies for future purchases could be put in place to maintain the system’s overall cost effectiveness.
The first step was to collect all available data using PAG Data Collection Process. Next, an item by item list of all services was created along with verifying the actual location and ownership of each item. Carriers were contacted to split off any inventory that did not belong to the client and billing was consolidated to ensure that the financial responsibility was correctly assigned.
Once the billing was reorganized, invoices could be reviewed for errors and discrepancies and issues stemming from incorrect rates, missing discounts, and continued billing after disconnection could be resolved. Other services that were no longer being used or that were out-of-date were also canceled. Once all the telecom services were fully consolidated, reorganized, and error-free, contracts could be renegotiated and promotions could be utilized to further reduce costs.
The New Telecom Results
These changes enabled the company to save almost 27%. PAG was also able to get more than $100,000 in credits for the company from excess payments made due to billing errors. Aside from cash savings, the number of invoices processed every month was reduced by half, the cost center accounting is now 100% automated, and new Procurement Policies are in place to ensure new orders are handled efficiently.
Outdated technologies were also replaced providing the company with increased bandwidth and all the client’s wireless devices were replaced at no charge resulting in better service overall. The new Inventory Management System now allows IT to isolate any telephone or Circuit ID number instantly.
Without the hassle of changing vendors and carriers and without investing any cash, the company was able to overhaul its entire telecom system, streamline billing and ordering, and save $365,000 annually on telecom costs.