Situation—Declining Operating Margins Required Re-Think
A leading telecommunication provider needed to reduce its operating costs during a multi-year period of declining revenue and competitive pressure. Operating margins for this business segment had dropped by 50%, and the CEO had demanded that margins be quickly brought back in line with targets. But over the preceding years the firm had already plucked all the low-hanging fruit that could easily reduce costs, so they brought on Capto to provide a deeper look.
Solution—Re-Architecture With Minimal Customer Impact
Capto’s team members worked closely with the company’s internal networking and finance teams, conducting a comprehensive cost audit of the existing network infrastructure and identifying areas for potential consolidation or elimination. While Capto quickly identified several areas for potential savings, we had to carefully plan and implement the changes to the network infrastructure to minimize the impact on customer service.
Using our industry knowledge and our technical and leadership expertise, the company effectively re-architected its key networking components, consolidated the number of providers to gain pricing concessions, renegotiated contracts, and improved service levels.
While this larger effort was underway, our team also worked with the company’s internal network group to spin up smaller audit projects, eliminating underutilized circuits and re-deploying equipment, resulting in further savings.
Finally, we established a program office to oversee these efforts over the long haul and provide weekly updates of progress and savings to the executive team. This communication platform enabled the team to engage sales, customer care, and executive support to proactively manage issues as they arose and to effect course corrections throughout the transition. The network transition was accomplished in under a year and netted $10M in annual savings.