Breakthrough Concepts

Telecommunications Case Study Revenue Leakage – Billing Improvement

thoare — Sat, 10 Nov 2012 17:10:51 +0000

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Telecommunications Case Study

Revenue Leakage – Billing Improvement

Part 3 of 4

Mergers / Acquisitions

Finding Operational Synergies

Captured 1.3 M in Revenue Leakage

Transform your Business

Lean/ Six Sigma Process Improvement

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In this continuing series of articles about how industries are transforming themselves by adopting LEAN/Six Sigma, we have already looked at some success stories in the Texas healthcare industry and a Florida utility company.

Further, in the past two articles, we also saw how a rural Pennsylvania telephone communication company, D&E Communications, Inc., after a merger with Conestoga Telephone, Inc. dramatically improved their financial bottom line by implementing LEAN/Six Sigma. Specifically, we saw how, with LEAN/Six Sigma, D&E improved its labor efficiencies, reduced overtime, and improved the quality and efficiency in its customer call center.

This week we continue looking at D&E’s LEAN/Six Sigma successes, this time in the area of shoring up its REVENUE LEAKAGE by improving efficiencies and consistency in its billing and dispatching.

Background of D&E Communications & Conestoga Telephone Merger

For a more detailed background of D&E, see article two weeks ago.

D&E Communications at a Crossroads

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D&E at a Crossroads: Use Hatchet or Scalpel?

As we pointed out in previous articles and is definitely worth pointing out again, like most telecommunication providers today, ten years ago D&E found itself at a crossroads–in the case of D&E, it was faced with declining access lines and revenue. D&E knew it needed to not only cut costs but also become more efficient and effective in serving their customers. But how?

The D&E executive team was afraid that the usual ad-hoc “hatchet” method of reducing costs (you know, cutting staff, salaries, employee benefits, etc.) would actually do more harm than good by eroding customer loyalty, market share and brand perception through lower service levels, inattention to customer priorities and poor execution.

On the outset, applying LEAN/Six Sigma principles, D&E set its sights on discovering their biggest opportunities to reduce costs and drive revenue. D&E first started this systematic process by “benchmarking” its processes and ”BEST PRACTICES” to gauge shortcomings and establish improvement targets. Then, as we saw in the last two articles D&E tackled labor inefficiencies, reduced overtime, and improved its customer call efficiency, all benefiting its bottom line.

This week we’ll look at D&E’s LEAN/Six Sigma dramatic success in increasing revenue by streamlining its billing inefficiencies and inconsistencies.

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I&R Revenue Growth – Captured 1.3 M in Revenue Leakage

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REVENUE GAIN. First, the results.

Remarkably, using LEAN Six Sigma, over a four-year period, nearly $1.3M additional revenue growth was achieved by streamlining the dispatching process and eliminating field service billing issues. (See, yearly revenue recovery graph shown).

Next, the process.

Again, applying the LEAN/Six Sigma processes such as “benchmarking” and “best practices, the cause of the revenue leakage had to be precisely identified and the potential revenue growth area quantified. Through this process, D&E discovered, with the data to back it up, that their field technicians were facing multiple roadblocks to accurately identify the services/items to bill its customers for service calls, a self-inflicted revenue leakage issue.

For example, some of the billing and dispatching issues that the LEAN/Six Sigma process identified and quantified included:

1) that field technicians were not consistent with themselves or each other as to knowing, while at the customer’s location, what was billable and what was not, thereby producing after-the-fact billing disputes and inconsistencies as to what was billed;

2) that field technicians were not consistent and always accurate in identifying and collecting actual billing charges while at the customer’s site because of the failure to collect critical information while at site thereby resulting in customers not even being billed at all for what clearly should have been billed; and

3) that there were billings disputes arising from simply not advising the customer prior to dispatching of the applicable possible charges, so that customers were surprised of after-the-fact charges.

LEAN/Six Sigma not only identified these and other billing and dispatching issues, but also quantified them, and provided a process for solving it. Now, armed with this data, by implementing LEAN/Six Sigma, D&E was able to plug the revenue leakage by streamlining the billing and dispatching process.

And, as noted above, the best part was that by shoring up this leakage alone, D&E realized significant additional revenue.

YOUR BREAKTHROUGH

Are you at a crossroads? Breakthrough Concepts, LLC is a company dedicated to specifically address the unique challenges of the telecommunication industry. Our team is LEAN/Six Sigma trained and telecommunication experienced.

Learn more about how to TRANSFORM your company using Breakthrough Concept’s Lean Six Sigma process tailored specifically for the telecommunication industry. Call me at 717-552-1179 or email me at thoare@brkconcepts.com.

Finding Operational Synergies – Telco Case Study Part 1

thoare — Fri, 26 Oct 2012 16:21:18 +0000

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Telecommunications Case Study

Labor Efficiencies & Overtime

Part 1 of 4

Mergers / Acquisitions

Finding Operational Synergies

Transform your Business

Lean/ Six Sigma Process Improvement

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Last week we looked at a Florida utility company that transformed itself by adopting Lean Six Sigma. This week, let’s get right to looking at the dramatic results of an actual telecommunication company study.

Background of D&E Communications & Conestoga Telephone Merger

In May 2002 Conestoga Telephone, Inc. merged with D&E Communications, Inc. and as a result created the country’s 20th largest incumbent telephone company serving more than 175,000 access lines and over 17,000 dial-up, DSL and cable modem subscribers.

D&E Communications at a Crossroads

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During its 100 year history, D&E developed a reputation for delivering excellence in applying technology and providing customer service.

D&E at a Crossroads: Use Hatchet or Scapel?

However, like most telecommunication providers today, ten years ago D&E found itself at a crossroads–in the case of D&E, it was faced with declining access lines and revenue. D&E knew it needed to not only cut costs but also become more efficient and effective in serving their customers. But how?

On the outset, applying LEAN Six Sigma principles, D&E set its sights on discovering their biggest opportunities to reduce costs and drive revenue. D&E first started this systematic process by “benchmarking” its processes and ”BEST PRACTICES” to gauge shortcomings and establish improvement targets.

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3 to 1 Labor Efficiencies & Reduced Overtime by 45%

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Through benchmarking D&E identified the following problem areas:

Customers were waiting too long in wait queue’s
Customers were being inconvenienced with protracted support calls
Labor Efficiences & Overtime
High Dispatch rates of field technician to customer locations
High ratios of Customer Service and dispatch technician to customer.

So, to leverage D&E’s 7×24 NOC and its capabilities to tackle these issues the organization adopted Lean Six Sigma methodology.

Lean Six Sigma, a discipline proven over several decades, offers the most effective way to reduce waste and costs while simultaneously improving speed, quality, and flexibility – all of which can enable competitive advantage.

This article is a first in a series of looking at D&E’s successes using Lean Six Sigma, staring with:

Reduced Overtime Costs

With Lean Six Sigma, D&E reduced overall overtime by 45% by reducing unnecessary truck rolls and managing customer support. At an average of $150 per truck roll D&E was able to reduce truck rolls by approximately 40% by performing adequate research before dispatching and finding the issue that could be solved remotely. The majority of this improvement came from the No-Trouble-Found category reducing it from 30% to 3% of all truck rolls. The No-Trouble-Found truck roll occurs when a field technician travels to the customer location which could take hours and finds NO issue.

Labor Efficiencies

Also, D&E established approximately a 3 to 1 improvement in labor efficiencies. Prior to starting its transformation process D&E’s Subscriber to Support Staff ratio was 1800 customers to one D&E support staff; within 3 years that ratio was 5000 to 1.

These efficiencies stated above saved D&E millions in labor costs while not sacrificing the “customer experience” nor the work environment for the D&E Team.

Next week we’ll examine the efficiencies gained at the D&E Call Center.

YOUR BREAKTHROUGH

Breakthrough Concepts, LLC is a company dedicated to specifically address the unique challenges of the telecommunication industry. Our team is Lean/Six Sigma trained and telecommunication experienced.Learn more about how to TRANSFORM your company using Breakthrough Concept’s Lean Six Sigma process tailored specifically for the telecommunication industry. Call me at 717-552-1179 or email me at thoare@brkconcepts.com.

How do you get started in transforming your business?

thoare — Thu, 18 Oct 2012 16:19:49 +0000

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How do you get started in transforming your business?

Transform your Business

Lean/ Six Sigma Process Improvement

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I don’t have to tell you that the recent global economic collapse spared no industry, government, or geography including the telecommunication industry.Virtually every business executive I talk with is concerned about reducing operating costs without compromising quality and customer service. And, you’ve heard it from the FCC too – the industry must transform because it’s no longer business as usual.

Hatchet or Scalpel?

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So, how do you start? Cut staff, employee benefits, raise prices of services?

Well, this ad-hoc “hatchet” measure may actually do more harm than good by eroding customer loyalty, market share and brand perception through lower service levels, inattention to customer priorities and poor execution. While newly frugal consumers and budget-conscious customers are certainly paying more attention to price – they still have high standards for certain product features or levels of service.

Without careful analysis and understanding of the drivers of cost, the outcomes can be hit and miss. You need a scalpel . . . you need Lean Six Sigma.

Lean Six Sigma drives value through a classic equation: operating income growth (by addressing efficiency) + revenue growth (by addressing what matters to customers, in a repeatable manner) = shareholder value.

So, where can you start? With a process called “Benchmarking”.

Benchmarking is a processe of measuring your organization against “BEST PRACTICES” to gauge shortcomings and establish improvement targets. In other words, it will identify the biggest opportunities to reduce costs and drive revenue.

Transforming Utility Companies using LEAN/Six Sigma

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Last week we looked at how the healthcare industry is adopting Lean Six Sigma to transform. This week, let’s look at utility companies.

JEA is an electric, water, and sewer utility located in Jacksonville, Florida and parts of three adjacent counties. JEA first incorporated Lean methods into its Six Sigma methodology in 2000 and over time and formally integrated the Lean and Six Sigma approaches in 2007.

Since project implementation began at JEA, the utility has accumulated millions of dollars in annual savings as a result of Lean and Six Sigma process improvement efforts including the following:

Achieved a utility-wide cumulative cost savings of $579 million from Lean and Six Sigma initiatives

Avoided an impact of $95 million on the utility’s 2010 budget from projects specifically focused on cost reduction.

Saved an average of $950 per customer and avoided rate increases of $20 per month directly related to process improvement efforts.

Completed over 580 projects since 2000.

For more details, see the Case Study at: http://www.epa.gov/lean/environment/studies/jea.pdf

Your First Step toward countering the FCC rulings!

thoare — Fri, 12 Oct 2012 00:44:37 +0000

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Your First Step toward countering the FCC rulings!

Transform your Business

Lean/ Six Sigma Process Improvement

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In today’s competitive markets, all companies are looking to make improvements that drive bottom line results. Many industries are finding success by applying Lean/Six Sigma to do things better, faster, and cheaper.

So, what exactly is Lean/Six Sigma? And, can it apply to the telecommunication industry?

Jack Welsh, former CEO of GE – LEAN Six Sigma

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First, Lean/Six Sigma is a process improvement methodology developed in the manufacturing industry in the 1980′s, then spread in 1998 when Jack Welsh, former CEO of GE, announced $350 million in savings thanks to Six Sigma, a figure that later grew to more than $1 billion.

Second, in the last few years Lean/Six Sigma has garnered much-deserved recognition in driving the operational excellence in the service industry as more and more organizations have applied it with great success to their bottom line.

Virtually every industry has had considerable success increasing revenue, reducing costs and improving collaboration using Lean/Six Sigma. This article is the first in a series, which will spotlight success stories in the service industry to show how Lean/Six Sigma can definitely apply with great success to the telecommunication industry.

Transforming Healthcare using LEAN/Six Sigma

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Consider, for example, how “LEAN/Six Sigma” is being used to “TRANSFORM” the Healthcare Industry:

In 2008, South Texas Health System (STHS) in McAllen and Edinburg treated 77 patients with ventilator-associated pneumonia (VAP) at an average cost of $40,000 each. Recognizing the costs associated with health care-acquired infections, in 2009 STHS applied Lean Six/Sigma principles, which included embarking on a systematic approach to reducing the incidences of VAP.

The results have been dramatic. MMC did not experience a case of VAP in the first two years of the project, saving an estimated $3 million in health care costs.

Further, with such success in reducing cost-draining VAP’s, the project served as a model for reducing other common hospital-acquired conditions, again with dramatic results. Since the program reached full implementation in December 2010, STHS has not recorded a single hospital-acquired stage 3 or 4 pressure ulcer, resulting in an estimated annual savings of $234,500.

For more details, see link to complete article:http://www.tha.org/HealthCareProviders/AboutTHA/PressRoom/SouthTexasHealthSys09BA.asp

Breakthrough Concepts, LLC is a company dedicated to specifically address the unique challenges of the telecommunication industry. Our team is GE Lean/Six Sigma trained and telecommunication experienced.