Phone lines are not a sexy topic, says Family Dollar Stores‘ CIO Josh Jewett. “But it’s a rock companies ought to
look under. It’s not well-managed at some companies, and it’s a
way to free up some dollars to the investment portfolio or to
the bottom line.”
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As Family Dollar continues to execute its Store of the
Future IT revamp, the company needs to save where it can.
Step One: Assess Current Conditions
About one and a half years ago, Jewett looked at the
company’s decentralized system for handling telecom expenses
and saw a roadblock. “If we didn’t manage the way we
grew, it was going to be a problem for the strategic
initiatives of the company,” Jewett says, adding: Telecom costs
had to be contained as the number of stores continued to
Step Two: Centralize Cost Management, Cut Out Paper
Family Dollar decided to adopt a telecom expense management
(TEM) system, choosing Asentinel as its provider.
“Today what we have is entirely centralized and we’ve
improved our ability to manage telecom,” Jewett says. For
example, paper bills have almost entirely disappeared, in favor
of electronic feeds which are managed by the TEM provider.
(Family Dollar bought a licensed application that runs in
Asentinel’s data center; Family Dollar logs in to the
application to manage the bills via a workflow process.)
A sample benefit: Asentinel audits the bills for known error
conditions, like phone lines that don’t match up to ones
owned by Family Dollar.
Step Three: Automate Reports, Analyze Activities With
What else does Jewett gain from his TEM system? “Now we have
much more granular detail on usage patterns and can do
exception-based reporting,” Jewett says. For example, the
company can note if a store is paying for call waiting (not
allowed) or if a store’s long-distance spending seems out of
line with others in the district.
Family Dollar’s mobile phones are not yet handled via the
TEM provider; Family Dollar gives a mobile phone allowance
depending on the person’s role in the company. The company uses
a similar setup to reimburse district managers who travel with
notebook PCs and EVDO cards for Internet access. In the future,
Jewett may investigate whether the TEM provider could build
these allowance programs into its solution, he says.
Results at Family Dollar
Results to date: Family Dollar’s ROI on the TEM project
includes saving approximately $600,000 annually by aggregating
and sourcing its local phone lines, or about a 15 percent
savings on local services, Jewett says.
The company has also realized cost savings via the automatic
audits performed on all local, long distance and data invoices;
these amount to another 1 percent savings on total telecom
spend per year. The company can also provision new telephony
services faster and spot billing exceptions better, plus track
the history of each inventory item from provisioning to
disconnection, he notes.
So at a time when the company grew the number of stores,
added significant telecom services (adding a high-speed data
connection to 20% of stores and a satellite network to
distribution centers) and added more than 600 EVDO cards to its
laptop fleet, overall telecomm spend stayed at a constant
percent of total company revenue, Jewett says. He’s also
avoided hiring more administrative staff in this area. Looks
like this rock was worth looking under.