New DON Mobile Contracts and Tools Drive Savings
By Mike Hernon - Published, January 17, 2012
In today's efforts to identify and leverage all potential efficiency opportunities, one area often overlooked is a device that hundreds of thousands of Department of Defense personnel carry every day — their mobile phone. With voice and data plans sometimes costing more than $100 a month, the DoD spends tens of millions of dollars on cellular bills every month to ensure that personnel away from the office have access to the information they need to do their job. Such a large sum presents an attractive target for cost-cutting.
Cutting mobile costs does not mean organizations must diminish mobility capabilities. They do, however, need to optimize the environment ensuring that users are given the right mobile solution, at the right price, and with the ability to monitor use on an ongoing basis. In practice, this requires that commands have access to contracts providing favorable rates, telecommunications expense management (TEM) tools that provide insight into use and billing, and the ability to make changes easily and quickly.
All these capabilities are available to commands in the Department of the Navy (DON) through the enterprise contracts negotiated and managed by Naval Supply Systems Command Fleet Logistics Center San Diego (NAVSUP FLC San Diego, formerly known as Fleet Industrial Supply Center San Diego). Existing DON policy already mandates that all CONUS commands use these contracts, and a new DON policy in development will also require use of the TEM tools.
Leveraging the Contracts
The new enterprise cellular contracts drive costs down even more than the previous contracts, which have been very successful in controlling DON mobility spending during the past several years. The new contracts allow commands to compare prices for their business needs simultaneously across all four major providers. This maximizes competition and will allow the DON to see reduced pricing throughout the life of the contract. There are other cost-savings benefits to the new contracts in addition to lower plan pricing.
Other benefits include the ability to get free devices on any plan and unlimited texting, as well as tethering options, which provide laptop Internet connectivity without air cards that will result in substantial savings.
Early results prove the point as Rob Baker, command information officer (N6) for Commander, Navy Installations Command (CNIC), put it, "This new contract helps CNIC meet our part of the DON IT efficiency goals for cell phones and BlackBerrys because it reduces our spend[ing] by about $800,000 this year without reducing our critical mobility capability."
Cellular communications are a key component for the CNIC mission, and the ability to maintain the coverage the command requires at a reduced cost is a significant enabler of its effectiveness — as well as an efficiency effort.
Leveraging the Telecommunications Expense Management Tools
Getting the best prices for cellular services from the contracts is important, as seen from CNIC's experience. But commands also require the ability to effectively manage their cellular use and spending on a monthly basis to ensure that their mobile capability is truly optimized and cost efficient. These management controls are also available under the enterprise contracts via the Web-based TEM portals developed by each cellular provider. The portals have been designed specifically for the DON's requirements and contract specifications.
Through the portals, commands have access to electronic invoices and monthly usage and spending data. This data can be presented in myriad ways, including standardized and user-defined reports. Devices and service plans can be managed and changed online for immediate effect — either for entire commands or for just one user as appropriate. Monthly data can also be combined to conduct trend analyses over time.
To drive the maximum cost savings, TEM tools enable commands to easily identify some of the most common sources of wasteful cellular spending:
Zero-Use Lines. These are devices that accumulate monthly charges but are not used. They may be kept in reserve for continuity of operations (COOP) or they may be assigned to somebody who does not need a mobile device. By examining the data, the command can decide whether the device should be on a flat rate, in the case of a COOP device, or be canceled.
Excessive Overages. Most people try to avoid overages due to the high per-minute cost of services when the pool plan's limit is exceeded. However, in reality, a small number of overages to cover unforeseen circumstances is acceptable and can be cheaper than upgrading to a higher pool. Consistent overages of 125 percent or more, however, are considered excessive. These can now be easily identified, and the users can be placed on the proper plan.
Significant Underuse. In their zeal to avoid overage charges, some people may buy many more minutes than they will ever use — sometimes up to double the amount. This is as wasteful as paying for excessive overages. Paying for double the number of minutes actually used means paying twice what is necessary for the same level of service. Previously, underutilization was difficult to identify, but today, TEM tools easily ferret out such information.
User Behavior. Some unnecessary costs may be avoided by modifying user behavior. TEM tools identify the practices and users that merit the most attention. One wasteful practice is the use of directory assistance. Cellular providers charge nearly $2 per call for this service. In many cases, the user could have easily looked up the number using the device's Web browser. Another costly usage charge is international roaming. Users planning international trips should have the proper international plan activated for their device prior to embarkation, otherwise significant roaming charges will apply. Charges can total thousands of dollars for one device for one trip. Once again, TEM portals permit this change to be made simply and online.
A Case Study in Efficiency
Through this multi-pronged framework of contracts, policy and automated TEM tools, Navy and Marine Corps commands across the enterprise are now positioned to optimize their cellular environment and realize significant cost savings — without impairing their mobility capabilities. CNIC's experience has shown the benefits of the strategic sourcing model that the DON has implemented for cellular services, which will continue to reap financial benefits for years to come.
Additional information, the contracts, ordering guide and templates are available on the NAVSUP FLC San Diego website at https://www.navsup.navy.mil/navsup/ourteam/navsupgls/prod_serv/contracting/market_mgt. For DON telecommunications policy, visit the DON CIO website: www.doncio.navy.mil/telecommunications.
Mike Hernon is the former chief information officer for the city of Boston. He supports the DON CIO in telecommunications and wireless strategy and policy. You may contact the FLC San Diego team via email@example.com.