Proper Inventory Management Helps Recovering $174K in Credits
Inventory management is one of the 8 cornerstone functions of our SaaS platform, ExpenseLogic. We won’t teach any CIO or CFO anything when stating that in any organization with remote locations, critical decision-making with respect to telecom equipment, lines and services requires that services, circuits, lines and equipment be inventoried at each location.
Finding out, after making a decision to switch vendor or technology, that telecom equipment has to be replaced may cause critical issues and derail the switch. Likewise, failing to disconnect unused lines and services may end up costing an organization any projected savings.
Telecom services and IT services are so completely intertwined that making a change at any remote location or at corporate headquarters can affect all of the remote locations. Resolving the issues mid-project may create new, unforeseen issues.
In the following case study, we show how the inventory management function of our SaaS platform ExpenseLogic® makes it relatively simple to track technology and telecom equipment, lines and services, and give an organization a repository of readily available information for further accounting and managerial uses.
Challenge
Our client is a healthcare company with over 700 locations: for reasons of costs and technological capacity requirements, they installed SIP trunks at each of their locations. The Project Manager was supposed to cancel all regular business lines as the SIP trunks were installed and put in operation. However, the Project Manager did not know what regular business lines were being replaced because best practices in inventory management had not been implemented. Our client had not carried out any inventory of the lines and services before greenlighting the project.
In addition, there was not enough time built into the project to allow the Project Manager to send thousands of disconnect orders to vendors. Once it was identified that lines had not been disconnected, the overpayments were estimated to $30K+ monthly.
Solution
RadiusPoint was hired for our experience with inventory management and the capabilities of our SaaS platform ExpenseLogic in the matter. Our mission was to assist with cancelling lines and services, with a view to generating immediate savings.
At the beginning of our mission, the regular business lines in service at each of the 700 sites were still unidentified. We made an inventory of a total of 3,632 regular business lines and identified the purpose of each line at each site. Additionally, each site had an inventory of phone equipment we also needed to identify for repurposing or retirement, and subsequent elimination of the associated monthly maintenance costs.
As the SIP trunk project implementation progressed, vendors continued to bill some of the regular business lines, even though proper service disconnections had already been requested. Through inventory management, RadiusPoint was able to work with these vendors over a 6-month period to get the lines disconnected and removed from billing, and the overcharges recredited.
Results
Our client learned the hard way that inventory management pays off. Knowing what equipment, lines and services were still in use would have given their managerial team a clear picture of what pre-requisite steps to proceed with before switching the technology stack. Combining 700 locations into a single project created transition issues with each location: these could have been avoided had the inventory been completed before the project was approved.
RadiusPoint used ExpenseLogic to flag any business line that vendors continued to bill. This enabled us to make contact immediately with the vendor and eliminate the charges. In addition, the asset management function of ExpenseLogic enabled our client to store a geographic inventory of their telecom/IT assets, all identified in database by serial number, warranty information, and site address.
RadiusPoint was able to identify and retrieve over $174K in credits by sending 4,049 disconnect orders to the telecom vendors.
Additional resources:
Asset Tracking and Inventory Management