Telecom Service Outsourcing Guidelines

Project Methodology


Figure 1 below describes in schematic the proposed project methodology. It is divided into five phases with each phase consisting of a number of tasks, and in some cases, sub-tasks.

Phase One- TBI will assess the current telecom services usage and costs, by service and by location and propose alternative methods of reducing charges. This will include a benchmark costing analysis to determine whether the subsequent phases which would be required to achieve the desired savings are relevant and cost-effective.

The following phases are not included in the proposal, but are briefly described for completeness.

Phase TwoTBI will create a detailed network specification and develop an RFP to procure the desired services.

Phase ThreeTBI will evaluate vendor responses and summarize the findings in an Initial Evaluation and Analysis Report.

Phase FourTBI will shortlist qualified vendors and negotiate a final contract for signature. Essentially this is a cyclic activity with repeated rounds of negotiation aimed at clarifying and reducing costs during each round.

Phase FiveTBI will project manage the implementation ensuring a smooth migration to the new facilities and ensure that the billing accurately reflects the agreed services and rates.

Phase One: Benchmark Design

The primary objective of Phase One is to understand the current telecom services usage and pricing and identify alternatives to reduce costs. For the purposes of describing the methodology, we assume that the most likely cost reduction opportunity is to negotiate a single voice services contract with a long distance vendor (e.g., AT&T, Sprint, and Qwest). There are four tasks in Phase One, which can be summarized as follows:

Task One is based around a two-hour Project Definition Workshop where TBI’s project members will meet by teleconference to agree the project scope, goals and objectives.

In addition, TBI will determine and document Client’s project needs to include a description of the sites to be included in the analysis and the methodology to obtain the necessary usage and cost data. The telecom services (e.g. local voice, long distance voice, cellular, paging) to be assessed and analyzed will also be identified during this stage. Finally, TBI will draft the agreed deliverables from this phase and present these in a telephone conference with client.

Task Two is designed to collect the necessary “raw data” for telecom usage and cost for each site agreed in Task One.

Based upon information currently available, TBI estimates the following Sub-Tasks are required under Task Two.

In Sub-Task 2a, TBI proposes to gather data primarily from existing sources at the Concord Facility and from requesting recent monthly invoices from the major administrative offices. Typically, TBI collects data remotely (initial letter / phone call, follow up, etc.) and has the data shipped to its offices in New Jersey for analysis.

TBI believes that the advantages of this approach, namely the rapid and cost-effective collection of most of the information required, outweigh the disadvantages, namely the slight loss of precision compared to an attempt to gather data from all offices. Where information is incomplete, TBI will estimate usage and costs based on office size and type and / or setting inbound traffic equal to a % of outbound traffic for known sites.

Task Three is designed to analyze the “raw data” from Phase One, Task Two, to develop alternative options to meet Client’s requirements for cost reduction

Clearly, the options to evaluate will depend on the information collected, but may include the following:

  • Negotiate single long distance voice contract for all sites;
  • Reduce 800 Remote Access Service usage;
  • Discontinue un-economic cell phone usage (replace with modern plan?);
  • Discontinue unused / under-used tie lines and trunks.

For each option, TBI will estimate the financial impact on current usage. Typically, TBI only evaluates options with the potential to reduce costs by 10% overall and by 20% for a particular service (e.g., long distance). Clearly, additional analysis is possible, but may not be cost-effective at this stage.

Significant technical and / or operational issues that would mitigate against the desired results will also be identified. For example, replacing existing cell phones with a new plan often introduces un-expected budgetary issues (does the central MIS group now pay all of the bills?) and user resistance (e.g., user’s desire to keep existing phone number).

This report describes Client’ telecom needs and usage and may also identify the preferred technologies that will support those needs. The report will identify current usage and cost by service, by location, along with the financial and technical evaluation of the various options to reduce costs. Finally, the report will include TBI’s recommendations for further action to capture the desired cost reductions.

Based upon its current understanding of Client’s needs, TBI proposes a simple text-based report which will be emailed and discussed via teleconference. TBI would be pleased to prepare formal presentations and / or present the findings in a face-to-face meeting if this would be valuable to Client management.

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