In this video case study, Sharon shares how RadiusPoint helped a global glass manufacturer with large retail operations in the U.S. to overcome a lack of procurement framework, and to curb their telecom expenses by $100K+ in Year 1 to get a ROI of 200% on TEM services.
Why was RadiusPoint hired for this TEM mission?
In this session we will talk about a glass manufacturing company for which we gained $100K+ in refunds and credits on telecom expense management services [during their first year of service with RadiusPoint]. This company manufactures glass for cars and buildings. They operate globally, and also have 200+ retail locations. They hired Radius Point because they needed to get their [telecom] invoices audited to identify errors.
They also needed assistance with ordering services as their 200+ locations nationwide would call vendors to order whatever services they needed — phone lines, long distance, cellular, etc. Corporate had no visibility in what these locations were ordering. They were very decentralized, and Corporate needed to get their hands around this.
The issue was the spending levels at the retail locations. Some [spent much more] than others. Just by looking at the cost-center allocations, management knew that giving each location the autonomy to go out and order their own services, the organization was not getting the best deal. They had no economies of scale either because they had no corporate contracts.
Starting the TEM Inventory & Audit
RadiusPoint initially performed a one-time audit to identify all the inventory (devices, services, lines). During our audit, we asked: “Is the service under contract?” We identified that locations may have had the same vendor (in many cases they had the same vendor, a major telecom operator), but were operating under different contracts.
We showed our client that everyone had done their own thing and had their own contracts. If we would consolidate this, they would be able to cut 20 to 35% off of each of their invoices by consolidating accounts under one corporate contract.
Establishing a procurement workflow
Apart from the overspending occurring at the locations, we also identified the absence of a workflow process to order services. We helped setting up a workflow such that if a given type of service was needed, the locations would have to follow a certain process and get specific approvals for that [service to be ordered]. Not only did it reduce their telecom expenses, getting global contracts in place, but it also was a method of giving Corporate [granular reporting] of “what each location has” and “here’s how we can streamline each location to be the same” — all of the 200+ locations were the same, a cookie-cutter approach, and yet, as mentioned earlier, the cost of services was different from location to location.
TEM: discovering and removing oddities
One curious thing about their locations was the “Call Forwarding” services at each location. When a location closed, they would “remote call forward” that line to another location so as to keep that phone number. At one location, we identified 6 incoming call-forward lines: 6 different lines coming to them from another location that had since been closed for years. And they were spending about $67 per call-forward service for lines that were no longer being used. We verified it: the lines were not being used. No one was calling those lines, but yet the location was still paying $67 x 6 each month for those services.
Telecom expense management means cost savings
A part of the services we provided, we gathered all service contracts, validating their expiration dates, then negotiated at corporate level so that the vendor [telecom operator] folded all of those contracts together. They did incoterm tremendously. Then also getting discounts because when you add services to a corporate contract, you always want make sure you get additional discounts to reduce costs.
So we did do that, and basically streamlined all of the different services this organization had under just one corporate contract. In Year 1, we saved our client $100K+ in telecom expenses, got refunds, and consolidated the contracts. On another note, they did sign up for our Telecom Expense Management Services because they knew how quickly this would get out of hand if they were to let the locations continue on with their ordering process. We set up the ordering process with our MACD portal (Moves, Adds and Changes, Disconnects) so any future orders had to go through our portal: we place those orders, making sure they are placed under the appropriate contract at the appropriate rates.
Accountability: TEM must generate a great ROI
Their ROI (which we calculate for each client on a monthly basis) has been over 200%. They are continuing to save on their telecom expenses, and not just soft-dollar savings from how we’re assisting their Accounts Payable and their Telecom Departments, but also for refunds and errors we are finding on the telecom operator’s invoices.