Telecom Benchmarking Case Study

 

Fortune 500 company in Real Estate Industry utilized Telmac’s telecom benchmarking service to assess its existing vendor contracts prior to entering an end-of-term negotiation session. A review of these contracts revealed the following issues:

  • Client was spending approximately $50 Million per year on its voice and data services.
  • Pricing was 20% above market.
  • Contracts were missing some significant contract language commonly negotiated by Telmac to protect the client. Carrier proposed eliminating local private lines as a contract contributory spend item while creating a separate sub-commitment for these services.
  • Telmac’s benchmarking analysis showed Client how they could save up to $10 Million per year by negotiating some key rates.
  • Telmac highlighted a vendor billing anomaly, which could be corrected via a contract clause change that could save Client up to $1 Million annually.
  • Telmac identified and suggested a host of recommended contract language changes that would protect Client and improve their future contract negotiating leverage.

 

Engagement Type:  Fixed price, with First Year Saving Guarantee, additional savings bonus incentive.

 

Savings Guarantee:  300% of fixed fee in first year.

Results

 

  • Telmac negotiated re-instatement of all previously contributory spend items while reducing previous contract overall annual spend commitment by 25%.
  • Telmac negotiated overall annual cost savings of over 20%.
  • Largest cost element of Client network was reduced by 30%, additional cost savings in other areas were as high as 50%.
  • Services that vendor had previous indicated were off limits to rate reduction were also reduced by at least 10%.
  • Language was negotiated to reduce carrier time to resolve billing errors by 50%.
  • Late fee penalties were addressed by changing payment terms, which Telmac escalated to Carrier CFO for approval.
  • Client ROI was 400% first year, and 1200% over new contract term, relative to Telmac’s fee.