Voice and data services - achieving significant cost reductions

In November 2004, the London Borough of Sutton (LBS) placed a three-year contract for Voice and Data Services. The main users of the services provided are the borough’s schools, accounting for 87% of the annual spend. The Council was pleased with the service provided by their telecoms provider and in 2007 exercised its option to extend the contract for a further two years.

 

In March of this year the Council agreed that in order to protect its initial investment it would seek a contract renewal with their current provider rather than going back to the market for new proposals. However, when the Councillors agreed this approach they asked for an independent Value for Money (VFM) review to ensure they were achieving best value for money.

 

Following a competitive tender Socitm Consulting was selected to undertake the review.

 

Socitm Consulting adopted a three-phased approach to this assignment. During the first phase we gathered information and agreed with LBS that our scope would cover three specific areas of the proposal:

In the second phase we analysed information gathered from various sources including, the current provider's proposals. Our consultant discussed the services with other LBS interested parties, the schools ICT Development Manager, Technical Architect and the overall Head of IT.

 

It soon became clear that the proposal was attractive in a number of areas but that there was scope for additional substantial savings and VFM.

 

With our extensive knowledge of the telecommunications marketplace we were able to quickly identify the strengths and weaknesses of the proposed offering. We found that the data network proposal offered excellent VFM in comparison with other offerings and supplier/customer relationships were good. However, the voice element of the proposal was less competitive compared to other suppliers on the Buying Solutions framework agreement. We identified that by moving to another tariff structure this would provide potential savings of up to £95k over a five-year period.

 

In the third and final phase we produced a detailed report of our findings, highlighting the VFM analysis, drawing conclusions and making recommendations.

Our recommendations have enabled the client to engage in a positive negotiation with its existing supplier and to achieve further cost savings as part of the new contract as well as developing their telecoms/network strategy in line with best practise. In particular, improved network capacity planning could deliver efficiencies through better network dimensioning.

 

Nick O’Reilly, Head of IT at London Borough of Sutton commented, ‘This was an excellent piece of work that has led to significant reduction in proposed costs of our future voice and data services, the consultancy work has leveraged savings eight times more than the cost of the consultancy and delivered other non financial improvements in the proposed contract. The council does not have the expertise to undertake such work itself, recognise the value that SOCITM Consulting have provided both to supplement our expertise and to act provide an independent analysis.   

 

Client organisation:                London Borough of Sutton
Client contact:                        Nick O’Reilly, Head of IT, 0208 770 5389 nick.oreilly@sutton.gov.uk

Lead consultant:                    Keith Harman

Project no:                              7171