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The Client

Valcon is one of Denmark’s fastest growing consultancy houses. Since its establishment in 2000, the company has undergone an impressive growth in customers, technology and staff. Currently operating throughout Scandianvia (Denmark, Sweden and Norway) and with offices in the Czech Republic, India and China, the company today employs approximately 150 consultants and is poised for even greater growth.

The Challenge

One of Valcon’s core competences is consultancy within the area of sourcing. As the company grew it's footprint and operational scope, the rising activity also gave rise to increased costs. However, Valcon has exploited not only their scale to extract costs, but also asked Telecom Danmark to help. “We have been in a position to make heavier demands on contractual improvements; and this way we obtained increased future savings”, says Maria Juhl Christensen, Head of IT at Valcon. Valcon looked to Telcom Danmark’s expert knowledge about data and telecommunication networks to deliver benefits such as savings of more than 50% on data and telecommunication costs.

The Solution

For the past 10 years, Valcon used the same telecommunications provider. Most traffic constituted mobile telecommunication. Three times Valcon negotiated a new telecommunications agreement, choosing to remain with the same service provider. However, as the company's international business grew, so did the growth of data traffic. The telecom consumption for 2009 totalled approximately DKK 2.5 million ($470,000). When, in the beginning of 2010, Valcon was once again facing a renegotiation of their telecom agreement, the company chose to involve the experts from Telcom Danmark.

”In connection with each renegotiation, we spent much time obtaining new offers from several providers. We were always of the opinion that, at each renegotiation, we subjected the various elements of our new contracts to a thorough analysis; however this time – having Telcom Danmark participating as consultant at the negotiation table – we experienced a far greater transparency. We have been in a position to place heavier demands to improvements in the agreement. And this way we achieved increased future savings”, says Valcon’s Head of IT, Maria Juhl Christensen.

Telcom Danmark provided Valcon with a two-part service. One part consisted of going back in time and investigating whether Valcon actually got the prices stipulated in the existing contract. The other part consisted of Telcom Danmark carrying out a thorough analysis of the call patterns and the types of calls and, on this basis, obtained new offers from competing telecom providers.

Naturally, when the new contracts were negotiated, Telcom Danmark was present as Valcon’s consultant with expert knowledge within the area. Due to their core competences and their expert systems, Telcom Danmark could provide a solution to both assignments. “We have always pursued a hands-on policy with respect to our telecom consumption. And we have kept a very keen eye on all data and telecom invoices”, says Maria Juhl Christensen. “At each new negotiation of our contract, we always tried to compare prices from various telecom providers, but we found it difficult to grasp the price structure, since different telecom providers offer different products.

"In retrospect, Telcom Danmark’s core competences and expert knowledge made it feasible to compare offers from the various telecom providers and, at the end of the day, this fact constituted the decisive factor as to why we achieved such a considerable saving”.

“I cannot help thinking of the saving potential existing for companies not pursuing a hands-on policy within the area of telecommunication”, says Maria Juhl Christensen. Likewise, Valcon is positively surprised that the work in connection with the saving benefits has been so extremely minimal. “The time we spent on the project only consisted of two brief rounds of negotiations and then the actual signing of the contract – in all, less than two days of the project period of approximately three months. This was made feasible because Telcom Danmark assumed the overall responsibility for obtaining all the data necessary for analysis as well as for the drawing up of the contract documents”, Maria Juhl Christensen explains.

The Results

Camilla Lindegaard, a consultant at Valcon specializing in sourcing projects, explained that there is enthusiastic appreciation of the scope of the cost saving actually achieved by the company. Also, people are surprised that in what was initially considered a highly competitive market should, in the end, prove to contain such a huge potential for cost saving.

Namely savings of more than 50% cost or DKK 3.5 million ($658,000) on the bottom line during the term of the new agreement. According to Camilla Lindegaard, savings of such a scale have only been made feasible through the accessibility of the right expert knowledge and the right competences.

About Telcom Danmark

Telcom Danmark has more than 12 years’ experience within the field of analysing the data and telecom consumption of medium-sized and large businesses – with a view to create cost saving solutions. Telcom Danmark’s unique expert knowledge is owing to the fact that, for as long as it has existed, the company has solely been focusing on and worked within precisely the sourcing area. Telcom Danmark’s work is typically performance-related, and thus the fees will be calculated on the basis of the savings obtained. In short, a sourcing project will be free of charge for the customer in the event that no savings can be obtained.

For more information: Telcom Danmark.

This case study is provided by the TEMIA member company, Telcom Danmark who are solely responsible for the content.