Parsons Insources its Primary Carrier Relationships and Redefines its Global Carrier Strategy with Alsbridge’s Help | Article
2013 Outsourcing Excellence Awards Winner BEST NETWORK SERVICES: Parsons and Alsbridge Network Services
“Out of the gate, the savings knocked it out of the park.”
Linda Ashworth, Telecom Manager, Parsons
Definition: The service provider worked with the client’s voice, mobile and data providers to benchmark and negotiate new independent telecommunications’ contracts after several years of outsourced managed network contracts. The service provider produced significant savings across five major areas of network tower spend and helped the client better understand its network services contracting environment.
Parsons, an engineering, construction and management services firm, had outsourced its entire IT for years to a major IT sourcing firm. However, in 2009 leadership at the Pasadena-based Parsons decided to move the IT function back in-house and re-establish its own network contracting strategy and subsequent contracting relationships with its three primary and two secondary network providers.
The original network and network management agreement for Parsons’ network services was between the outsourcer and Verizon, with Parsons paying the outsourcer in a traditional managed network arrangement, including convoluted pricing and management fees. With this change in philosophy, Parsons had to establish its own relationships and contracts with all of its network services providers. In addition to achieving market-based pricing on its own stand-alone contracts, Parsons had to also ensure the package of business terms and conditions in these new contracts were market-leading and appropriate based on Parsons objectives and policies.
“We had to get our arms around an enormous, decentralized environment,” recalls Linda Ashworth, Telecom Manager, Parsons. “We had a lot of spend we really didn’t understand. “ Even more important, “We had to establish our own relationship with Verizon and our other primary carriers,” she explains.
The Parsons’ team was presented with a daunting task as Parsons IT provided network services to 11,000 employees worldwide. When the relationship started, Parsons had an annual network budget exceeding $5 million.
The immediate challenge: selecting a provider
Previously, Parsons had used Alsbridge Network Services for Parsons’ corporate mobile agreement. The company’s $1.2 million savings netted a 39 percent reduction in wireless costs, while maximizing current wireless market incentives and contract enhancements across its three wireless carriers. “We were comfortable working with Alsbridge. And out of the gate, the savings knocked it out of the park,” Ashworth says.
Parsons contacted Alsbridge at a critical juncture, and the Alsbridge team quickly issued an RFP to the network carriers. The result: “We looked at a lot of providers but decided to stay with Verizon as our primary carrier and bring in AT&T and BT as secondary carriers for specific global network applications. This also helped to drive competition within our environment,” Ashworth reports. The reason: The savings from the other contenders did not justify the cost to switch the entire network given the embedded nature of the Verizon data platform; however, enabling competition within Parsons network environment has forced the incumbent to react differently moving forward by creating circuit diversity for risk management and redundancy purposes.
Subsequently, Parsons has also engaged Alsbridge for benchmarking and contract negotiation support in a number of critical OT spend areas including collaboration, data center/hosting, remote global wan networking, TEM RFP support and a number of significant hardware and software contract negotiations. In one example, conferencing and collaboration, “We were extremely unhappy with our conferencing partner. Alsbridge did the procurement of a new, global collaboration partner for us” Ashworth says.
The bottom line: Significant savings
Alsbridge Network Services conducted a total of 10 specific negotiations for Parsons:
- First wireless negotiation
- First wireline negotiation
- Data center
- First wireless review
- Web and audio conferencing
- Second wireless review
- Hardware and software review
- Second wireline renegotiation
- Third wireless review
- Back up circuits
To date, Alsbridge has saved Parsons over $4 million, allowing Parsons to achieve a 56 percent incremental growth in network bandwidth while keeping the actual year-over-year network expenses virtually flat. Ashworth is impressed that the Alsbridge team continues to wring out savings, even on the third pass.
Why this relationship works
Regarding Alsbridge personnel, Ashworth says, “The Alsbridge team has been kind, cheerful and responsive.” She says she appreciates the fact they “refuse to tell stories.” She continues, “Our relationship with Alsbridge is based on trust and honesty. I always feel like I received all of the information.”
This relationship works because each party is understood and trusted. Ashworth summarizes it this way: “The management style of the Alsbridge team was collaborative, but never demanding or dominating. They never told us what to do, unless we asked. Instead, Alsbridge shared their opinions, insights and offered the guidance we really needed.” The final decision always belongs to Parsons.
And isn’t that how it should be?
Have you examined your network services contracting strategy lately?