Identification of telecoms billing errors leads to £4m savings for large UK Central Government organisation

30%

savings in annual spend

1000+

services identified as zero usage

Overcharged by

£2m

£1m

ceased services still billing

Background

Veropath provided visibility of the telecom estate and found significant savings and areas requiring optimisation; this included the identification of telecoms billing errors and services no longer required.  The result was almost £4m in savings from a 6 month project. By continuing to use the TEM solution, the customer will continue to run an efficient and optimised telecom estate, and get the best out of their supplier contracts.

Challenges

The customer’s telecom estate had not been closely maintained for some time, thanks to multiple contract changes and a high turnover of staff, and thus it was hard to determine the accuracy of the billing and whether the services being billed for were still in use. It had become incredibly difficult for the organisation to successfully manage their estate and there was limited control or transparency of the £12.8m annual spend. An additional challenge was the volume of change, due to location closures and the replacement of legacy technologies such as kilostream and megastream.

They had previously engaged their existing telecom provider to perform an audit across their Fixed (Landline) and WAN estate. However, over an 18-month period this activity had been unsuccessful due to the volume of billing data to review, plus the lack of tools that the provider had to accurately analyse the estate. Furthermore, the complexity of the billing was compounded by a combination of excel-based summary billing and pass-through billing – the resulting situation was complicated, disorganised and made identification of telecoms billing errors very difficult.

The customer was also in the process of re-contracting with their existing supplier for a further term and were struggling to agree an inventory position to be carried into the new contract.

How Veropath Helped

Veropath worked closely with the customer and their existing supplier to gather key information about the estate and enter it into their online Telecom Expense Management (TEM) portal – known as Veropath 2. This sophisticated tool enables millions of transactional records to be loaded and analysed and the Veropath team built a full inventory of all services active within the customer’s estate – an accurate inventory is fundamental to all subsequent TEM activities. This key information included:

  • transactional billing data that underpinned the excel based billing.
  • site lists including closed locations.
  • historic order details over a 24-month period.
  • customer reference information that enables classification of services.

The inventory-building activity was completed in just 8 weeks. Veropath assisted the client in gaining visibility of all the underlying charges that were making up the billing. This gave an unprecedented level of understanding, not only of what was being paid for, but also whether those services were genuinely required. Veropath also gave a clear picture of the estate by tagging circuits and services to locations, and they were able to highlight a number of areas of incorrect billing and potential rationalisation. Through invoice validation Veropath identified telecoms billing errors where the client was being overcharged. With a product level breakdown of charges, the team validated spend against both a price book and the market to see if the customer was getting value for money, as well as a comparison against the existing contract to see if there were any overcharges.

They identified key items within the inventory and associated billing, including:

  • 1000+ services were identified as zero usage – these are services that had not been used consistently for a period of 3 months or more and were therefore no longer required. Before classifying a service as Zero Usage, the Veropath 2 portal will first confirm that it is not a dormant yet necessary service, such as an alarm line, lift line, any disaster recovery services or PSTN lines associated with ADSL services.
  • 1,650+ services were identified at 54 closed locations – some of these services crossed over into Zero Usage, but some were being used by the new occupant of the location.
  • £2m of overcharging over an 18 month period – across PSTN and ISDN services. The correct tariffs had not been applied, nor had the incumbent supplier met their obligation to provide the customer with the “most favourable tariff for comparable services”, as agreed in their contract.
  • 114 different price points across three services types.
  • All legacy products that need to be replaced or removed from the estate over the subsequent 12 months.
  • C.£1m of ceased services that were still billing despite having being historically ceased.

Using the Veropath 2 portal, the customer could see for the first time a clear and accurate picture of their entire telecoms inventory and all associated billing. Key areas for optimisation were highlighted, telecoms billing errors were identified, and crucially the customer now had an informed position to support their future procurement activities.

Results, Return on Investment and Future Plans

Veropath supported the customer in securing c. £2.5m of historical rebate from the existing supplier while driving over £1.1m of future savings over the subsequent 12 months. Furthermore, these activities enabled the customer to reduce the number of services being carried forward into the new contractual arrangement.

The key now for the customer and the incumbent is to make continued use of Veropath 2 portal to ensure ongoing transparency and control are maintained across the estate.