Access Cost Control and Allocation
Synaptitude developed and implemented a monthly invoice consolidation and access circuit inventory cleansing process which saved $3.3 million in annual external telecom supply costs.
The US division of one of the world’s leading providers of communications solutions and services. Its principal activities include networked IT services, local, national and international telecommunications services, and higher-value broadband and internet products and services.
Project Overview & Objectives
The client made international process improvements to clarify its intercompany access spend, and determined that there was a gap of $2M per month between its access cost in the US division and the amount it could allocate to customer contracts. This was due to an inaccurate and unpriced access circuit inventory which had not been reconciled to third party supply invoices. The client asked Synaptitude to team with one their key managers to execute a detailed circuit allocation and price validation exercise and reduce the gap.
Synaptitude’s team developed and implemented a monthly invoice consolidation and access circuit inventory cleansing process which helped the client to price and correctly allocate access circuits quickly. This team worked with other client staff in Service Delivery, Finance, Order Entry and Sales in order to fix process issues causing the excess costs and to verify whether circuits could be ceased without customer impact. The Synaptitude staff discovered a series of large billing errors from one of the vendors and worked directly with that vendor to realize over $500k in credits due to the issue. In addition to the initial goal of allocating and pricing circuits, the team found, researched, confirmed and ceased more than 200 customer access circuits that were continuing to bill even though the client’s systems listed them as ceased. The team worked with the suppliers to stop incorrect billing and achieve credits for past bills. Synaptitude staff also developed a detailed monthly process and task list to transition the invoice consolidation process to analysts on the client team, and assisted the client with ideas on other areas of the business which could benefit from similar analysis.
Results and Benefits
The end result of the project was no more gap between access cost and recovery, over $3.3 million saved in annual external supply cost, which can be traced down to individual customer access circuits from several different vendors, and $515k in realized credits from external vendors. Other benefits include a clean, priced access inventory to aid in profitability analysis and planning, as well as detailed processes to aid the client in avoiding these issues in the future. Additional benefits may be realized in the future as the client applies these principles and processes in other countries and business units.