This short case study details a recent telecom audit and analysis TelCon Associates, Inc. completed for a 34-location health system. The organization consists of a central hospital facility along with smaller satellite locations spread throughout a large southeastern U.S. city.

Our intent for presenting this case study is twofold: 1) to stress the importance of routine telecom auditing of your voice and data services as part of your overall cost-reduction strategy, and; 2) to give you specifics (i.e. savings uncovered, examples, methodology, etc.) of exactly how each portion of the telecom audit was completed and savings were uncovered so that you will better understand the variety of possibilities for telecom cost-savings.

For the purposes of this case study, four areas of telecommunications services will be examined: long distance service, local service, wireless, and paging. As you will soon see, each area contains specific problems - some of which are obvious and others that are quite unique.

Keep in mind that from our experience completing telecom audits for over 30 years, this organization is typical in the fact that prior to this telecom audit huge unnecessary spending was occurring on a monthly basis.

Long Distance Service Audit

Although it tends to get little press these days, long distance phone service usage is still alive and well. Many organizations however do not maximize their telecommunications dollar by implementing a well-designed long distance strategy.

In this case, the main health system campus telecom department provides long-distance access to all of the other locations through common dedicated facilities. Unfortunately, many of the outlying locations were incurring monthly switched long-distance charges, primarily from AT&T.  Worse yet, many of these locations were billing for the monthly minimum of $15.95 plus tax - with NO outbound usage at all!

After some careful detective work and weighing many options on how expenses could be reduced in this area, we discovered that the county in which this health system is located is under a multi-year contract with Paetec Communications. The contract covered IntraLata, InterLata as well as International long-distance services.

The county contract long-distance rates were excellent for all services just mentioned. Because this health system is a “county hospital”, we were able to place all 34 locations under the umbrella of the county long-distance contract. Although the county contract with Paetec is for eight years, the health system is only obligated for a total of two years.

These implemented changes resulted in total long-distance savings of $8,175.54 per month, or $98,106.48 per year.

Local Service Audit

Local service plans and contracts carry great potential for major cost-savings. Most companies are simply unaware of the many options for local service or how to go about negotiating the best deal they can get from either their current provider or a new one.

In this case, we decided the best route was to negotiate an entirely new contract with BellSouth.  Once approved by the board of directors, the new local service contract resulted in savings of $26,800.95 per month or $321,611.40 annually.

Wireless Phone Service Audit

Stroll through any large company or organization today and you’ll find almost everyone toting a cell phone. Since wireless service is considered a necessity to conduct business, the majority of companies cover the cost of phones and monthly service for their employees and staff.

The wireless industry is competitive and changes occur very quickly with new rates and plans emerging onto the marketplace all the time. The good news is that constant change always carries opportunity for big savings in the wireless arena.

Everyone knows that wireless services are billed on monthly basis for a set amount of usage. In other words, wireless companies do not care whether you actually USE the phone, they will bill you regardless. At the time of this telecom audit, our health system carried a total of 543 wireless phones - a whopping 108 of which had no usage for the previous 60 days!

It seems rather obvious that if a phone is not used for 60 days or more, it should be canceled and that is exactly what we recommended. Eliminating these unused wireless phones resulted in a savings of $5750 per month, or $62,364 per year.

Nextel carries the service for the remaining 435 phones - all of which were on different monthly plans. Non-uniformity in wireless plans across many departments will almost always result in “overage” for some and under usage for others - and this situation was no different.

To reduce wireless expenses we recommended a Nextel plan that would “share” minutes between ALL users. The plan selected was a $47 per month plan that included 500 anytime minutes, unlimited nights/weekends, unlimited “direct-connect” minutes with free long distance calls included. By combining departments of an organization into a “shared minute” structure, implemented savings totaled roughly $21,804 per month or $261,648 per year.

On a side note, we discovered that the health system was receiving only a 10% discount - NOT the 18% contract discount promised. The change was implemented going forward with a refund due from the time the contract was signed. This additional discount alone will add an $45,600 in future annual savings.

Paging Service Audit

Pagers are still widely used today, especially in hospitals and health organizations. Our case study health organization employs a total of 1294 pagers with Arch Wireless as the provider. Most are numeric pagers but some text pagers are active as well. Numeric monthly fees range from $2-$5 while text message pagers range from $5-$35.

Interestingly enough, this health system owns the frequency for a paging company called Metrocall.

Our recommendation? Use the paging frequency that is owned by the company and eliminate the current provider. This recommendation resulted in a monthly savings of $5197.46 or $62,369.52 per year.

This case study resulted a considerable reduction in telecommunications expenditures following the voice and data audit. Although it was very successful in savings rendered for this health system, it is by no means a unique case.  Virtually every company and organization, especially multi-location companies, are ripe for telecommunications savings.

The bottom line for this telecom audit? A total annual telecom expense reduction of $789,335.40.

Submitted by: TelCon Associates, Inc.