Introduction: unrealized cost savings prompt audit
This case study focuses on the potential for cost savings stemming from a thorough audit of suppliers’ invoices for existing telecom lines and services. The audit covered by the case study was performed after our client had switched out of their old telecom technology. It was triggered by the fact the cost-cutting plan that had presided over the switch to a newer technology had failed to generate the expected cost savings.
A telecommunications technology upgrade may or may not come with an equipment purchase. However, it definitely comes with changes in billing and, possibly, new vendors. Transitioning telecom services and technology to a new technology stack over multiple remote locations is a daunting task for a CIO. Not knowing what services and equipment were used by each business unit is a nightmare scenario for a CFO.
Problem
Our client, a medical supply organization with over 300 locations nationwide, had hired consultants to help them transition from an old telecom technology to a cutting-edge technology stack. They had replaced copper business lines used for voice/fax services and the MPLS platform that previously handled their data services. On paper, the savings looked great. But one year into the changeover, our client’s management team realized that the cost savings projections were short by over $250K.
An audit of the situation uncovered the following shortcomings:
- No inventory was made before the transition to identify what services were used at each location
- No equipment inventory was made at each location
- All circuits replaced had not been cancelled
- Additional network monitoring services had not been cancelled
Solution
Our client’s management and Accounts Payable teams did not have the time to go through each telecom vendor’s invoices to identify what services were still being billed.
Instead, they hired us with a mission to proceed with a thorough audit of the situation.
Our multi-step Inventory & Audit service includes a complete “scrub” of each invoice to identify what is actually being billed on a monthly basis.
RadiusPoint ordered Customer Service Records, as well as ANI and toll-free reports. These are just examples of the reports requested to complete our deep dive into the invoices covering the telecom services received by our client before their technology changeover.
Telecom audit outcome
The outcome of our Inventory & Audit service came as a major shock for the management team.
RadiusPoint identified:
- 47 remote call forward lines in place for 10 years… but had never been set up to be used
- Duplicate DSL services
- 50 copper lines left in service (not cancelled) after being replaced
- Phone lines assigned and charged to the client’s long-distance account… but belonging to other companies
- 260+ toll-free lines without a Ring-to number, and therefore unutilized
- Phone lines billed at a rate of $1.77/minute outside the client’s long-distance carrier’s contract rate (even though the PIC codes were attached to that long-distance vendor)
- 25 circuits that had never been cancelled
- Associated circuit services (i.e. network monitoring and usage accounts) that had not been cancelled
Results
RadiusPoint identified all the invoices that could be cancelled immediately. We assisted our client in requesting refunds for some of the services that had continued to be billed. Once the invoice scrub was completed, RadiusPoint had identified over $250,000 in services that should have been disconnected or refunded by the vendor.