State of Tennessee: Peer Benchmark Improves NetTN Costs

State of Tennessee: Peer Benchmark Improves NetTN Costs

Overview

The Office for Information Resources (OIR) had a vision is to deploy a robust unified statewide network to urban and rural Tennessee communities by leveraging the buying power for all branches of government, higher education, local government, Tennessee Emergency Management Agency, K-12 districts, and nonprofits state wide.

Business Challenge 

In 2009/2010 the State spent $40 million for AT&T services.  The Department of Finance and Administration retained Z Consulting Group to conduct a Benchmark Analysis comparing the Tennessee (NetTN) Contract (FA0925220) telecommunication rates with public and private peer institutions.  The benchmark was used to leverage the State’s negotiations with AT&T to decrease costs for future and current Lines of Business (LOB) on the NetTN Contract.

Process

Working closely with OIR, Z Consulting structured a collaborative process addressing the costs elements for a competitive price assurance Benchmark Analysis of the State’s NetTN contract.

There were three processes performed with a defendable audit trail addressing 1) cost for services, 2) activity level by customer groups, and 3) peer and market comparisons.
An overview of the benchmark analysis with the NetTN Executive Steering Committee provided the Team direction on prioritizing the Lines of Business to be re-negotiated with AT&T.

Results

Many government agencies are facing a tight budget environment and are looking for pragmatic means to assess their cost structure, realize accelerated cost reduction without reducing service quality.

“Zahid Masood and Karen Mattis provided our Team with the methodology needed to compare the costs elements for each line of business for the Benchmark Analysis conducted with 9 southern states. The Benchmark analysis gave Financial Services the leverage needed to improve our costs for many of the services on the NetTN Contract.”  

Jim Winters
NetTN Operations Director

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