Bill Audit Enables Lam Research to Realize Huge Savings and Credits
Background
Lam Research is recognized as a leading supplier of wafer fabrication equipment to the worldwide semiconductor industry, whose corporate offices are located in Fremont, CA.
When we started working with Lam in 1999, they lacked an in-house inventory database to reconcile against the provider’s invoice billing.
The lack of documentation meant that there was limited ability to track disconnects/cancellations of telecom lines and circuits, especially at closed locations.
In the past, charge-back by location was not utilized, causing IT to absorb most of the network charges.
Cell phones and pager usages were not being reviewed and managed for rate plan appropriateness.
There was minimal audit trail for cell phones, pagers and calling cards usage, especially for terminated employees.
Due to the complexity of the contracts and billing, there was limited expertise with the telecom tariffs and billing, which created an inability to audit signed contracts with providers.
There were limited resources to track network expenses.
There was a lack of experience verifying network charges for accuracy as well as a lack of knowledge regarding the process for developing and initiating claims with providers and pursuing tariff disputes.
There were insufficient resources to track monthly billing of telephone numbers with no usage.
There was missing detailed audit billing which resulted in multiple bill anomalies.
At the time, there was multiple invoice billing for a single provider (e.g., a Domestic Frame Relay account had numerous individual invoice billings instead of one master account for all domestic sites). And there were also multiple vendor bills for other types of accounts.
Challenge
Perform an intensive detailed network bill audit.
Identify billing anomalies.
Maximize cost savings.
Secure credits for customer.
Solution
An IPI team of experts performed the following services for the client:
Created a database, by location, for all necessary information and reconciled the inventory with the bills.
Acted as a liaison to inform the provider of incorrect billing.
Performed usage analysis and made recommendations for a better rate plan.
Audited and tracked telephone numbers with no usage for at least a three month period and recommended disconnects with the network management’s approval.
Results
Developed claims and secured refunds and credits in the amount of $3,437,544.
Achieved savings of $6,486,949 over a one year period from the bill audit.
The total savings above include approximately a 50% per month cost savings for cell phones and 65% per month cost savings for pagers. Received a total credit of $100,000 on cell phones and pagers.
Approximately $400,000 annual cost savings on disconnect of telephone numbers with no usage.
50% savings to Telecom cost centers by devising a charge-back procedure (not included in the savings total).
The savings include a WAN RFP and contract negotiations which brought an additional $873,495 in annual savings, representing a 35% savings for the revised data network.
Lam Research now has an accurate inventory of all telecom expenses and processes to better manage the billing.
As a result of our bill audit efforts, Lam has significant funds available for IT projects.
As a valuable resource, IPI continues to manage the billing and conduct regular audits.
