Welcome to the last installment in our 5-part series on IT cost cutting.
In Part 1, Lafarge North America learns to negotiate from a position of strength with vendors AT&T and Hewlett-Packard, saving “seven figures” in the process.
Read Part 2 to see how Gap saves up to $1 million from a $400,000 systems administration project that also helps the retailer with PCI and SOX compliance.
In Part 3, the U.S. Department of Defense uses an asset management project to consolidate Oracle licenses, use printers more efficiently and discover unsanctioned software on its network, which leads to multiple millions in savings.
Read Part 4 to see how Washington Mutual turned green IT in a projected 3 million greenbacks via PC power management.
Today’s installment reveals how Title Resource Group cut upwards of 30 percent from its monthly cell phone charges.
Flaunt Your Cost-Cutting Smarts
E-mail CIO.com writer Kim S. Nash and tell her about your money-saving project. Be sure to say how much the effort cost, what the financial returns were and how soon you saw them. Bonus points for projects implemented in three months or less, with substantial returns within a year. Your project may be featured in a story on CIO.com or in CIO magazine.
BlackBerry, iPhone, cell phone, pager — personal devices of every sort were rampant at Title Resource Group, a real estate closing company that’s part of the $6 billion Realogy Corp., which owns Century 21, Coldwell Banker and other franchises.
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This time last year, Title Resource employees could use any cell phone they wanted for work, even personal devices that they, not the company, owned. Corporate calling plans for managers, sales reps and other employees allowed for a few hundred minutes per month.
Some employees used a personal plan, even on a company-owned device. Other employees submitted cell phone charges on monthly expense reports, says Nehal Trivedi, CIO at Title Resource.
As a result, the company didn’t know exactly how much money it was spending on cell phone bills. But Trivedi had the feeling it was too much.
“A thousand dollars a month raises a lot of eyebrows,” he says. “If it was your home bill, you would look into it no matter how affluent you are.”
Trivedi needed data to make a business case for reining in cell phone expenses. So business intelligence specialists in IT worked with corporate finance to collect the data from invoices and expense reports. Armed with specifics, Title Resource then negotiated contracts with two preferred cell providers, AT&T and Verizon, that give the company better rates.
Employees were then categorized as minimal use, voice-only use and voice-and-data use, Trivedi says. Minimal-use employees are capped at $40 per month in usage. Voice-only people get plain cell phones, not smart phones. Those allowed voice-and-data plans can get BlackBerrys or other smart phones, he says.
Title Resource enforces the limits by sending spending reports to senior managers every month, detailing whose monthly bills were highest. “We started paying attention to the top talkers, and [their bills] are difficult to justify,” Trivedi says.
The project took a few months, and the company saw savings with the first phone bills, Trivedi says. He declines to specify how much he’s saved, but says companies can knock 30 percent to 35 percent off their monthly cell bills this way. Corporate cell phone usage policies are increasing, as the devices themselves pervade companies.
Savings from a project like this depend on the level of control the company exerted on cell phone usage at the start, says Erik Dorr, senior IT research director at the Hackett Group. “If the starting point is entirely unmanaged and the new state is tightly controlled,” he says, “then 30 percent to 40 percent is entirely reasonable.” International roaming charges are especially expensive.
Of course, there was pushback. If there’s one thing people grow attached to, it’s their phone, smartphone, handheld device, PDA—cool devices define the corporate self the way a fancy car might. One recent study showed that while BlackBerrys dominate the enterprise, iPhone users are happiest.
Trivedi had to tell people that yes, they must give up ownership of their main work device. But after he showed them examples of how much they’d be saving the company, most bought in, he says.
If employees wanted to keep a second device, they could choose to do so at their own expense. And they did get to keep their old phone numbers.
Finally, the top-talker report loomed, he says. “No one wants their name on there.”