Podcast: Is It Time To Spring Clean Your Network and Telecoms Estates?
TNC’s Down The Wire Podcast brings you Episode number 8 entitled “Is It Time To Spring Clean Your Network and Telecoms Estates?”
John Waterhouse, CEO, interviews Head of Consulting and TNC commercial guru, Adrian Joyce.
Did you know that cleaning up your network and telecoms estates is one of the most effective, but least well-known approaches to delivering cost savings? In TNC’s expert opinion, this is one of those rare approaches every organisation can take, irrespective of where they are in their technology, contract, or procurement cycle, and almost all organisations will achieve cost savings and wider operational benefits. However, this approach is often over-looked
Network and telecoms estate management can be challenging for several reasons and this complexity is fertile ground for errors to arise – whether that is misbilling by service providers, or estates becoming unclean because services that should be ceased aren’t, the long-term effect is that organisations lose track of their inventories, and therefore their billing.
According to industry research, the average organisation is reckoned to be overspending by 12% on network and telecoms services, because of their inaccurate inventories and billing.
What can be done to address these issues, and drive cost savings? The short answer is ‘audit and cleanse’. John and Adrian address the following questions:
- What exactly is audit and cleanse?
- What is the size of the prize?
- Are there other benefits organisations gain from cleaning their estates?
- What are the key steps to successfully deliver audit and cleanse?
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Well, hello everyone, I really delighted to welcome you all to TNC’s latest podcast and our topic this time is an absolute cracker. “Is it Time to Spring Clean Your Network and Telecoms Estates?” I’m John Waterhouse, CEO of TNC, and I’ll be your host for the next 20 minutes. As I’m sure everyone joining knows, TNC is the UK’s largest independent network and telecoms strategy and sourcing consultancy. We support over 280 major UK and multinational organisations and help them to get the best possible commercial, technical, operational, and contractual results from all of their network telephony and mobility services. So joining us from TNC today to share his expertise, is our Head of Consulting and all round commercial guru, Adrian Joyce. Adrian, would you like to say hello to our listeners and viewers?
Yeah. Hello, everyone. Great to be here. Looking forward to this topic.
So, as we said, today is a cracker – and it really is: “Is it Time to Spring Clean your Network and Telecoms Estates?” So this is a topic very, very close to Adrian, and my heart, and we’re really looking forward to talking with you about it today. And the reason we think this is a great topic is really simple: cleaning up your network and telecoms estates, and the inventories, and the billing, is one of the most effective, but one of the least well known approaches to delivering cost savings. And, you know, in TNC’s expert opinion, this is one of those rare approaches that almost every organisation can take, irrespective of where you are in your technology lifecycle, in your contract lifecycles, in your procurement lifecycles; almost any organisation can can achieve cost savings and wider operational benefits from cleaning up their their estates.
But the irony is that this is an approach that’s often overlooked. So today, we’re going to explore why that is, and what you can do to gain those benefits. As always, let’s start with a little bit of context. So for most organisations, network telecoms, and mobile expenditure, are some of their largest IT costs, in fact – often the very largest IT cost. So these are really significant areas of expenditure. But managing those estates and the billing and the inventories can be really challenging, and there’s a number of reasons for that: the estates, are typically very large, so lots of sites with WAN connections; lots of voice connections; lots of mobile connections; variable and complex usage charges; and of course, the estates are constantly in motion, they’re constantly changing – sites open and close, employees join or leave, contracts expire, technologies change, etc. And this complexity is really fertile ground for errors to arise. So whether that’s misbilling by service providers, estates becoming unclean because services that should be ceased aren’t… The long-term effect is that organisations lose track of inventories, they lose control of the billing, and as a result, most industry research suggests the cumulative effect of this is substantial, and the average organisation is reckoned to be overspending by around 12% of their network and telecoms expenditure because of inaccurate investment, inventories and billing. So we’re talking some pretty big numbers, Mr. Joyce. And so yeah, given these issues, the real question is, what can be done to address them? And how can our listeners and our viewers start to drive cost savings in this area? The short answer is going to be Audit and Cleanse: I don’t wish to to steal your thunder. But let’s start with some first principles. Can you take us through what exactly is Audit and Cleanse?
Yeah, so I think the analogy that you’ve given already John, is really good: this spring clean analogy of your estate. So what we’re doing in Audit & Cleanse is trying to find and check the validity of every Pound, Euro, Dollar, (whatever the currency), every Dollar that is spent – looking at it and understanding what it is: Where it is? What is it for? Is it relevant? Is it accurate? And putting that all together and finding as you say, the areas where there is duplication or overspend inaccuracies. So in our experience, wherever there is mess and untidiness, there is this chance, a good chance in our experience, that things will be incorrect and this covers a variety of different areas, as I said; whether it’s sites that have been ceased where the billing is still ongoing; whether it’s duplicate billing, so you’ve had an upgrade on a service, but you’re still paying for the old service. All of these areas. So really this spring clean is trying to understand what the estate really looks like, and then comparing it to the ideal. What should it look like, from a contractual point of view, from an estate point of view? And putting that together, determining where there’s a problem and how we tackle that problem?
And in terms of the size of the prize… because that’s what you know, for a lot of people, that’s what they’re interested in is… “What can what benefits can I deliver from this?” We talked about sort of 10% to 12% cost saving; are there other benefits as well?
Yeah, absolutely. So that that 10% to 12%; it’s pretty accurate in our experience, but where that comes from does vary from estate to estate, and service to service. So again, you talked about estates being in flux. So someone in say, the construction industry, might typically have many sites coming up and down, so the chances of old sites still being billed, or inaccuracies in terms of mergency provisions going into sites, and then being replaced by Ethernets, (or whatever it might be), is always there. Other estates: Manufacturing maybe, you have a very stable estate but then in that organisation, you might have a lot of short-term workers coming in: you give them a mobile phone, you take the mobile phone away from them. So it depends on the sector and the estate, and depends on frankly, how much work has been done on inventory accuracy in the past, as to what the size of the prize is.
But there are also other benefits, getting a tidy inventory helps with Change Management, it helps with Incident Management: just the whole efficiency of knowing what your estate looks like. You’re able then to justify the spend when someone approaches you, whether it’s Audit Committee, whether it’s the CIO, to say: “Why do we spend a million pounds on this?” “Well, we service 1,543 agents, at £10 each, and there’s these fees, and these fees…” You can justify it. So it looks very good from that point of view. But there are other benefits as well, when you do this, particularly from using our experience, our expertise. When we look at these estates, it’s quite easy for us to spot aged pricing – so pricing that no longer represents the market expectation. Now if you’re within a five year contract, and you are two years in, and you’ve got bad pricing: there’s not much you can do. But often when we’re going into these inventories, particularly on the Voice side of things, these things have been running for years, and years, and years. They’re perhaps on annual renewals, or just going month to month. So not only can we see what the inaccuracies are: where the supplier is mismanaging the billing – you know – incorrectly billing you; where you’ve got duplications; where you’ve got sites that should be ceased; we’re also seeing things like zero billers. We are seeing lines or people that no longer exist, or are not required. So we’re looking at those to see, “Is that line needed?”
Now it might be that there’s a very good reason for that line: it might be an alarm line; it might be a lift line; just because it’s not showing usage, doesn’t mean it’s not important. We had one of our Healthcare companies who had fridges that stored blood, and were plugged into PSTNs, and they only ever used that PSTN when the fridge failed, to say: “This blood is going off; you need to put it into another fridge”. So of course, you don’t want to see slides like that, that’s probably not the best option. But yeah, if you are finding these, then you’re getting to an accurate inventory stage, and there’s lots of benefits there.
You also find things like user abuse- another great example we had, (so the obvious ones are people on their mobile phone using loads of data, and you find out that they’re sitting on the side of the road instead of doing their job, watching Netflix), but we’ve also had one where an individual was using an excessive amount of text every day. So that company then explored this as an HR issue, ‘Is this person doing their job?’ and actually sadly, they found that that person was using their phone in an abusive manner. So the main benefit is: cost saving; the additional benefits are accurate inventories that lead to better outcomes, and the ability to justify your spend, but also there’s lots of other fringe issues around this.
Okay. So, I mean, that’s that’s a really broad range of benefits. So if there are so many benefits, why are organisations sometimes a little bit reticent to dive into Audit & Cleanse? I suspect the word complexity is going to rears its ugly head any minute now. What are the main challenges an organisation might face when it wants to try and unlock these cost savings and these other benefits?
Yeah, it’s time and effort. When I look at my garden shed, every time I go in there to find something, I think: ‘I must tidy this shed, it’s a disgrace’. But every time I look to tidy it, I think, ‘Where do I start? You know, this is days of work. I’ll just leave it: it’s not doing anyone any harm. I can find things when I really need them’. And I think it’s the same for your network estates. Typically, this stuff isn’t hurting you, so yes, the inventory side of things, Incident Management, maybe there’s an argument there… but typically, the things that are most important to your network, you have got a good grasp of. But yeah, it is complicated, particularly if you’ve got multiple suppliers, multiple services, if you’re split into a variety of sub companies or departments, you begin to spend an hour or two looking at this stuff… as network professionals in your life, “I’ve got better things to do with my time”. And I think that’s where, fortunately for us, that’s where we can come in, we can parachute in resources that are used to doing these things, that can explore it, that have an eye for this detail – that have got the systems, the processes that stand behind it, that typically a network specialist wouldn’t have in an enterprise business – they’ve already got day jobs to do.
Presumably, that’s part of the problem here, increasingly, IT organisations are extremely lean, so they don’t have the resource “sat around” to get stuck into these, you know, more challenging, more complex activities?
Absolutely. Typically, this is important stuff, but it’s not urgent and therefore it gets left and it just festers, and the longer it’s left, the worse it gets, but it’s not hurting. But yet the opportunity exists, to have better outcomes, to save money – you know – this is one of the simplest ways to save money that we have found. Yes, running procurement processes is great, and they can save substantial amounts of money; renegotiations can save money, but that all takes time. This is something where you can get some experts (such as ourselves) in, and, you know, we can work away and, as we’ve said at the top of this podcast, 10% to 12%, is typically the outcome here.
Okay, so take us through what are the main steps that an organisation would need to go through to unlock these, these benefits? I guess we’re going to start with data gathering, right?
Absolutely. So there’s a number of key things that you need: you need to understand what it is that you should have in your estate, and you need to base that on on some facts. So they typically start with understanding what the contract landscape is, so getting hold of all the contracts, change notes, anything of relevance from your provider; you will then need to ensure that you’ve got the right contact details both within the supplier, and within your wider employee base, because there will be people that you want to talk to about the services. “Hey, why have we got three lines in Swindon?”, Where you might need to speak to the Swindon office manager or the person in charge of Voice. So understanding who those right people are in some organisations can be challenging, because it can be very diverse. You then need invoices. We need to understand, “What is the supplier actually billing us for?” So whether that’s electronic invoices, or access into portals, to be able to do that analysis. And then you know, other things like Site Lists; understanding ‘Is Swindon, a current site or not a current site?’, because if I see Swindon in the contract, and I see Swindon in the invoices, and it is billing accurately, you’re not to know that actually Swindon closed five years ago, and shouldn’t be there at all. So those are those are typically the things that you’d need to start with.
I’m going to make a statement which might sound obvious but, those sound like things that most organisations should be able to produce. “Have we got a list of all our sites?”, “Sure, we have!” “Have we got a list of all our contracts?” “Sure, we have!” But I think in practical terms, and I can see from the smile on your face as I say these things, it’s surprisingly common that organisations can’t lay their hands on a site list, or an inventory, oftentimes – their invoicing – so even just that first data gathering piece can be surprisingly challenging, right?
Absolutely, and you know, there are extremes, and it varies from organisation to organisation. So we’ve been in to do this activity with some organisations that really can turn behind them and pick off the shelf, the inventory, the invoices, the contracts -but that’s rare. Most organisations probably can’t immediately get hold of all of those things, and you’re talking – probably 60%- 70% of the information is available, but then the 30%- 40% becomes a bit of a challenge. There are extremes at the other end where we’ve been contacted, and they really haven’t got a clue: what they’re spending; where they’re spending it; whether they’ve got contracts; who’s ordered services?; what those services are for?; who’s paying for them? You know, they may not even necessarily be being paid for by IT, maybe going through individual projects that they’ve instigated in the past, that have turned up a site with telecom services, but the project pays for it. Again, other extreme examples are where you have many child organisations coming into a Group parent, but the Group parent, the IT function of the group, doesn’t know what France has done with Lyons, for example. Yeah, so it’s real variety. I think the commonality that we found across all of those examples is, we always find something wrong. There’s always inaccuracies, there are still challenges. So even the best work that has been done in the past, you can still find problems. And maybe it’s the accuracy of the billing from the supplier, so the actual inventory list is really good, but when you start looking at the price points for the calls or the circuits, or pricing, you’ll find problems.
And presumably there’s a correlation between the challenge of gathering the data and the likelihood of inaccuracy, right? That if organisations are struggling to piece together their contract landscape, their inventories etc, the likelihood that the billing is then going to be correct is much lower – because how is that organisation validating that billing? Are they validating it? Are they checking it? Are they really, just kind of signing it off? Or hey! it was the same as last month… you know, so presumably, those two things correlate together: the harder it is to piece together, the more the likely savings…?
To a degree. I think there are different areas that we focus on that we’ve mentioned a few times in this call, so something like the site level accuracy of an organisation that’s got a really good handle on the detail, that’s probably really good. They know Swindon was ceased five years ago, and they won’t tolerate seeing Swindon on the invoices – so that stuff has been done. But it doesn’t necessarily mean that the person doing that analysis, fully understands the billing of complex telecom services and has therefore been able to analyse that against the contract, against the rates, has a view on the market rate, so that side of things can still be an issue. But generally yes, you’re right.
Okay. And, presumably, the impact of COVID has made this harder for organisations? I’m thinking about particularly (I know, we found in the past), you know very often an organisation will have an individual who really knows this stuff, and he or she has been in that organisation years and years, and knows all the right places, and all the right people, and all the right data, and so on and keeps this stuff quite clean. But we have found in organisations, that person has been furloughed, or they’ve been let go, as part of the response to COVID, and as part of that they’ve lost that ownership and that control.
Yeah, I think we could talk at length about the impact of COVID on employment and how people are working, and the pluses, and negatives of it. I think one of the things that’s going to be a challenge, if it isn’t already in these estates, is understanding the impact of the mothballing of sites – so you will have sites that don’t have any users on there, therefore, you’re not showing any usage. Was that, not showing any usage historically? You know, do we have to go back two years to go – right, it still wasn’t being used then… But of course, the challenge is now if there’s no one at that site, then of course, there’d be no usage. Then the further challenge is – are there going to be people at that site? Should we be ceasing that line? Is it an emergency line? Is there anyone on site that can tell us? No? So yeah, COVID has definitely caused a couple of different levels of complication on this. But again, that’s opportunity; that’s potential overspend that you could be reducing.
I guess as well you know, COVID has accelerated the trend towards sort of – as it were, the individualization of network and telecoms costs. So I mean, think about something like telephony – 10 years ago, telephony was: “We’re gonna buy a big PBX and we’re gonna park it in a basement somewhere”. And the cost of the individual connection on that was was pretty marginal compared to the cost of the big lump of PBX. Now that organisations are moving towards ‘per seat charging’, the need to keep on top of those inventory lists… so first of all, those inventories have become more complex, because it’s now not one big lump and a maintenance charge, it’s individual billing, but the the need to keep on top of it has increased as well…?
Yeah, absolutely. And spotting those zero billers in that. So yes, the individual cost is higher, therefore the impact of not processing your leavers, for example, is greater, but also spotting the zero billers? Are they justifiable? You know, we’ve done a lot of work with an organisation, basically taking their HR list and trying to understand, well, who’s this person – they’re not on your HR list? Who are they? Down to cyber stalking them across LinkedIn to work out – well, actually, they left your organisation four years ago, according to LinkedIn. So yeah, lots of different outcomes that we’re seeing off this. But you’re right, it’s a higher spend per individual, therefore greater impact.
Really super interesting stuff. I’m conscious our time is now short. But I think that, you know, what you’ve shown us Adrian is, the prize is significant. And the challenges are not insurmountable. They’re challenges of, it’s a bit of sleuthing, right? It’s trying to get those data points together, taking quite a rigorous approach to this, but I presume that there’s a sort of final point to this, which is if you climb the mountain of doing all this data gathering and getting the estate clean, and so on, what you don’t want to do is then abandon that process once you’ve done all that great work, and let it go wild again, and let the…
Once once I tidy my shed, John, I will be on top of that shed forevermore because that’s the only way…
…I believe it. I believe it!
…Mrs. Joyce won’t!
That’s also true. But presumably, once you have tidied your shed – or in this case, your your network and telecoms inventories – keeping them clean, is actually relatively straightforward. You put the processes in place to ensure that happens…
(…talk over each other). Yeah, sorry, John. What that also leads to, is it’s easier to spot when things are going wrong. So if you’re constantly cleansing it, let’s take the leavers / joiners example, if every month you’re analysing that and you’re taking these 10 people off, and putting these 12 on; that keeps it clean, but then you can very quickly spot where something falls out of that process. You know, a name pops up that hadn’t been on before, and that’s not on the joiners list – where did they come from? It’s very obvious.
Absolutely. Absolutely. Adrian, fascinating, as always. A really, really interesting topic: as we promised our listeners and viewers – it’s a cracker! It’s a great opportunity to drive an awful lot of benefits into your organisation. It might not be as sexy as some of the topics we get to talk about on our podcast, but…
…I don’t know what you mean. The next dinner party that I have once Lockdown is over, this is the topic! So anyone that’s really interested, let me know.
I have no doubts whatsoever. Adrian, thanks as always for your fascinating insights. And thank you everyone for for listening and watching. Please do let us know any questions you may have on this, or any other network and telecoms topic – you know, we love to talk about these things. And you can get in touch through our website: that’s networkcollective.co.uk, or any of the usual social channels, and we look forward to talking with you again soon.
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