Webinar Notes: SIG/Emptoris Telecom Services Webinar
BMP viewed Sourcing Interests Group’s recent webinar, “Uncovering the Telecommunications Spend Treasure Trove” Presented by Emptoris, on February 22, 2011 and took the following notes.
We haven’t found the archived copy posted on either SIG or Rivermine/Emptoris’ websites yet, but if you are sourcing or managing telecom category spend, there are several other webinars and a series of whitepapers available on Rivermine’s website. (Emptoris announced their acquisition of Rivermine on January 6, 2011)
Safway Customer Case Study, Presented by Andy Reiland
Safway is a North American scaffolding company with 4,000 employees and $800M in annual revenue. Three years ago (before bringing their telecommunications spend under management), all of their locations handled telecom services locally with paper billing. The company (versus the individual) was liable for the cost, but there were no master spreadsheets for analyzing spend or usage, and no real controls to enforce policy.
In November of 2007, they brought all of their spend under one major account. When selecting a provider, they considered three cellular service providers. Their objectives for the solution were:
- A website that allowed management of the spend at overall and local levels
- Reporting and optimization in Excel
- Achieving the right balance of branch and top management
It took 90 days to centralize all of the plans and users. Their savings to date are $810K+ (or 25%), which breaks out into to $766K in voice charge savings and $4,500-6K per month in text message savings (they use approximately 11-12K text messages per month).
Safway achieved their voice cost savings primarily by pooling minutes. Their actual rates stayed relatively flat. They also reduced the number of plans from 1750 to 1500 through the identification of unused devices and employees that had left the company but not been taken off the corporate account. Now that the spend is under management and being watched closely, optimization of usage data allows regular plan adjustments in response to usage fluctuations.
Forrester Market Perspective, Presented by E. Onica King
The telecommunications spend category is a number of services including: voice, data, text, modems, devices, and conferencing. The average Fortune 500 company spends $116M on telecom services annually, which represents approximately 20-30% of their total IT budget.
Twenty years ago, telecommunications spend was managed by consultants doing invoice audits on hundreds of paper invoices. The 7-14% average realized savings were usually from mis-charges Now, the average organization has even more invoices in some combination of paper and e-formats. More than half of employees use mobile devices to get their work done. All of this has meant a disproportionate increase in the total wireless spend.
With all of the administration that is required to properly manage telecommunications spend, manual resources are no longer adequate in most cases, and automation is used when possible. In a recent Forrester survey, 71% of respondents indicated that cutting network and telecommunications spend was a priority, when compared to other work that might be done within the category.
The value proposition associated with this category of spend is an evolving one, and may be broken down into four phases:
- (Tactical) Telecommunications bill audit
- (Tactical) Telecommunications expense management – where most companies are today
- (Strategic) Telecommunications lifecycle management – includes inventory management, ordering and provisioning, workflow automation, and ultimately strives to improve policy compliance
- (Strategic) Telecommunications Supply Chain Management – sourcing, contract management, and full use of available optimization
So how do you build a telecommunications expense management strategy?
- Evaluate your current environment
- Identify your business needs
- Define solution requirements
- Develop an implementation roadmap
- Establish criteria for measurement and evaluation of ROI