04: Shared Services in a Telecom Supplier

A subsidiary of an international telecommunications organization was responsible for the sales and support of hardware and replacement parts to a network of hundreds of independent telephone system retailers and installers spread across the U.S. This organization grew through consolidation, resulting in a number of similar (but not duplicate) procurement, order fulfillment, distribution, and customer support processes centered around various facility locations. Consequently, dozens of different customer-facing activities and experiences were being managed (though not all of which were unsatisfactory). Unfortunately, due to the lack of standardization, it became increasingly difficult to measure performance from order entry to product delivery. It was common for product orders to remain open for weeks and months following delivery to the field. And, due to widespread duplication, the costs related to these activities seemed to be out of control (when they could be accurately measured).

A review of the information systems used to support the retailer network and an analysis of the core products (e.g., handsets, power supplies, base units, expansion boards) found that contrary to the SKUs in the inventory databases, a relatively small number of parts accounted for nearly all of the unit’s sales. The solution was to implement a central parts depot with a shared services center to focus on order execution. This allowed for the closure of unnecessary facilities, migration to a single information system and the consolidation of order fulfillment and inventory management processes (all product deliveries were shifted from ground to air express). In addition, this model allowed the organization to use existing resources to build a team of product experts capable of assisting sales activities and more quickly responding to technical issues from the field.

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