In common with the wider public sector the NHS has challenging targets for driving cost savings from its Telecommunications services, combined with an ongoing and ambitious change programme.
Background
Salford Royal Foundation Trust (SRFT) specified the following guidelines for cost saving opportunities identified within the review:
- Minimal impact to the service and end customer
- Absolute transparency
- Maximum of 12 months extension to any service
- Full consultation on any change
The Problem Being Addressed
The NHS Trust requested ASE to introduce Cost Management techniques to address the complexities of the contracts, tariffs, management and organisation created during the development of the Telecoms services.
As a result there are 4 strategic supplier relationships and over 30 discrete contracts, employing a varied set of commercial models. This complex environment generates a range of challenges, including uncoordinated termination and exit provisions and poor alignment to the changing business needs.
Approach
SRFT commissioned ASE to perform an initial high level cost management review of their Telecoms services including billing and contract agreements.
ASE adopted a phased approach to the engagement:
- Phase 1: consisted of collecting information, base-lining the service, identifying and recommending cost saving options. This was offered free of charge.
- Phase 2: was to implement the agreed saving options together with recommendations of improved practices to maximise efficiencies which ASE offer as a flexible 'gain share' package.
Our approach was to introduce the delivery improvement service and review, baseline, negotiate and deliver cost savings across SRFT Telecoms services. This approach is encapsulated within the following ASE guiding principles for Cost Management:
| Cost Awareness |
Understanding the associated term commitment for new service orders. |
| Cost Accountability |
Promote accountability for all users' own cost of services. |
| Cost Avoidance |
Manage the benefit/cost analysis to stipulate if the cost is required. |
| Contract Management |
Ensure the contracts are accessible for monitoring tariffs and services. |
| Cost Closure |
All services planned must be mandated to have a controlled, scheduled exit strategy. |
It is the ASE marque to provide an independent view with the unique ability to develop and deliver ownership of 'Cost Management' techniques to the customer and also enhance the on-going service. ASE achieved immediate short term savings, including skills transfer, whilst creating a sustainable cost management framework for the future.
Outcome
- A review and baseline of Voice Services identifying cost reductions, improved billing information and cost avoidance techniques.
- A working partnership to deliver immediate and agreed savings totalling 33% of annual Telecoms spend.
- Incorrect billing and overcharges identified and actioned.
- Delivery improvement by renegotiation of network services and tariffs delivering optimised and improved terms and conditions.
- Shared cost management techniques and skills transfer.
- Gain share –effectively the exercise pays for itself