Case Study 4

National Distributor

The CIO of a nationally recognized Canadian organization faced a critical challenge: reducing monthly telecommunications expenses by 20% to avoid cutting services for users. With telecom costs exceeding the budget by approximately $25,000 per month in the first three months of the fiscal year, the CIO needed a monthly reduction of $35,000 for the remaining eight months to meet budgetary commitments.

Upon a colleague’s recommendation, the CIO engaged TelOptimize to conduct a comprehensive telecom audit. Given the urgency, TelOptimize rapidly gathered all relevant invoices, contracts, and network configurations to build a detailed Inventory of Services across Local, LD/TF, WAN, Internet, and Wireless.

Within 45 days, TelOptimize presented a detailed report of key findings:

• WAN Network Overcharges: The client’s MPLS rates were 35% higher than current market rates for similar services, despite being locked into a three-year contract signed four years prior, which had automatically renewed with 24 months remaining.
• Inflated Internet Costs: The client’s rates for ADSL, DS1, and 20 Mbps Internet services were 50% higher than market rates, with each service under separate agreements, differing terms, and automatic renewal clauses.
• Unexpected Wireless Cost Surge: A 20% increase in wireless expenses occurred due to a recent Blackberry deployment, which the CIO had not approved or budgeted for. While hardware costs were covered separately, the IT department was responsible for monthly service fees.
• Inefficient Wireless Plans: Voice and data plans were not optimized based on call volumes and traffic patterns. Savings exceeding 20% per month were possible through rate plan optimization and pooled service plans.
• Underutilized Local Services: Traffic studies revealed inactive or underutilized local services, with PRI Local Access circuits improperly sized or configured.
• Unnecessary Local Private Line Charges: The client was billed for Local Private Line OPX services that were no longer required after office consolidations.

Upon client approval, TelOptimize led negotiations with the primary vendor to establish a new consolidated Master Agreement, featuring separate Service Schedules for Local, LD/TF, WAN, Internet, and Wireless services. This new agreement, along with service optimizations and the elimination of unnecessary charges, resulted in:

• $40,000 in monthly savings
• Realigned telecom expenses to match budget goals
• No reduction in user services

Through strategic cost management and vendor negotiations, TelOptimize successfully reduced costs while optimizing telecom services, ensuring the client’s financial and operational stability.