Increased telecom cost visibility achieves 73% reduction in spending for Scottish City Council
Found billing errors of over
Within 6 months of our engagement, significant savings were identified and implemented. These savings included a 73% cost reduction by removing surplus services relating to a secondary supplier, the identification and resolution of billing errors, and the removal of 34% of overall landline spend with the primary supplier. As a result of improved telecom cost visibility we identified 55% of landline services as zero usage, and there were billing errors in excess of £160k relating to ceased services still billing.
Existing Situation & Challenges
This city council organisation had a large estate split across two suppliers with over 3,500 active connections and 500,000 calls per month, all being managed via excel based records. The council’s smaller invoices had previously been gone through by hand in an attempt to tidy up the estate following its move to VoIP, but this activity was time-consuming, inaccurate, and tough-going. They had spent over 6 months working on various ways to reduce their carrier costs, but no successful manual solution had been found. The council recognised they would need outside assistance to improve telecom cost visibility and realise cost reductions on the remainder of their estate.
One of their key questions was whether their primary supplier was billing them correctly, so invoice validation was a key objective for the project. In November 2015 Veropath was engaged to tackle these challenges.
How Veropath Helped
The initial activity was to create an inventory of the telecom estate. The Veropath team loaded all the data from the primary and secondary suppliers into Veropath’s Technology Expense Management (TEM) portal, along with all relevant metadata and contract information. Forensic analysis of this rich data was then carried out to enable the identification of savings.
The two most significant areas of findings were zero usage and closed locations – these accounted for almost 60% of total savings identified. Veropath completed invoice validation activities which identified minimal error and gave the council confidence that the invoices they were paying were correct for landline services.
However, due to the complex combination of a contractual change, change in technology and pressure to obtain data, the primary supplier did not invoice the customer for its WAN services for 15 months. As of March 2017, the primary supplier has conceded that they don’t know what services they should be charging for and are negotiating a goodwill credit for the errors in WAN charging.
Results, Return on Investment and Future Plans
The savings that have been achieved as a result of increased telecom cost visibility are well in excess of the fees charged by Veropath to the city council, so they are seeing a positive return on their investment.
Thanks to the success of this initial project, the city council is looking to expand the scope of the TEM agreement to include a review of all its mobile services.