This case study focusses on a financial services client that had a fixed line telephony spend which had not been reviewed for a number of years. The supply chain consisted of two suppliers and the opportunities to make cost savings were potentially to reduce lines which weren’t being utilised, remove services which weren’t being utilised and to review the tariff applied to the account.
Whilst there would have potentially been a further opportunity to incorporate mobiles phones into this review this was not possible due to the contracts having been recently reviewed.
The client was a mid-sized financial services provider. Whilst fixed line telephony was not one of the larger spend areas it was seen as an area to review given it hadn’t been reviewed for a number of years.
One of the initial challenges was a lack of data in terms of an asset register and in terms of call usage information. With this in mind an initial piece of work was commenced to work with the supplier base to fully understand the ‘current position’ from a service, commercial and contractual perspective.
Aside from the data the challenge from the client was to ensure that they were obtaining the best value for money from their fixed line telephony spend and this would ultimately involve the creation of a tender process to engage a range of suppliers.
- Lack of ability to widen the review to encompass other telephony spend
- Lack of available data to conduct the review
- Lack of time available from the client to commit to the review
From the initiation of this project, it became clear that the challenges could easily be overcome by working very closely with the incumbent suppliers to help bridge the gap from our side with the knowledge of how the account is currently working.
The incumbent suppliers were extremely helpful and provided all the data we requested on time and in the format required. From this point, the strategy was to right-size our requirements prior to drafting a tender. This process focussed on removing redundant lines and services no longer required. Essentially cleaning up the fixed line telephony estate.
Once this process had been completed this left the client with a final set of requirements which we tendered to 6 potential suppliers including the incumbents. This process was very transparent and focussed predominantly on who could deliver the solution in a way that the client was comfortable with and the most cost effective.
The tender process ran incredibly well and efficiently, and we led the end-to-end process including the contractual negotiations.
- Implement a single source supply chain
- Remove all lines and services not required
- Manage a robust tender process
Following a comprehensive tender process the category solution agreed with the client was to award a 2-year contract to a right-sized fixed telephony solution provider who was one of the client’s current incumbent suppliers.
This strategy delivered unit price and removal of service savings of 40% which the client was extremely pleased about given the limited time which they had to commit to the process.
Aside from cost savings, the tender review re-invigorated the incumbent provider to have a greater account management focus on the account to ensure that the estate is managed ongoing to a higher level.
In addition, it was agreed that any lines or services added in the future will co-terminate on the same contract end date as the new agreement which was seen as a great benefit by the client.
- Award a 2-year contract to a right-sized telephony provider
- Significant 40% cost savings
- Right sized the telephony estate
- Co-terminus contract agreed
The success of this review has been based upon the way in which the client has allowed us to progress the review due to their limited time available. That being said the client contributed fully at the key steps of the process where required.
Aside from the significant cost saving benefits mentioned in the solutions section of the case study we also led the review of the supplier contract to ensure that all commitments made by the supplier were captured including the service specification, the service level agreement, and the key performance indicators and costs.
The cost savings are clearly impressive and could only be achieved so quickly by having a very experienced commercial knowledge of this category area in terms of how to progress this review and where the savings could be generated from.
- Sustainable and significant cost savings
- More highly motivated telephony supply partner
- Limited investment in time from the client to deliver this result