RAC aims for mobile consolidation savings

The RAC has switched to Orange Business Solutions as its sole supplier and hopes to save £1m by negotiating favourable call...

The RAC has switched to Orange Business Solutions as its sole supplier and hopes to save £1m by negotiating favourable call and rental rates for 5,000 users on the road.

The RAC Group expects to save £1m by consolidating its mobile accounts with a single supplier across its operations, which include RAC Motoring Services, the BSM driving school and Auto Windscreens.

Previously, the RAC used a variety of service providers to handle the mobile needs of its 5,000 users, but it has now appointed Orange's Business Solutions arm as the sole provider of its mobile handsets and voice services.

Phil Ralph, communications development manager at the RAC, said a key problem with the multisupplier relationship was "the inability to drive appropriate rental costs and call rates".

Other problems included inefficiencies in handling accounts and mobile devices. Administration was complex because of multiple points of contact and the firm lacked centralised control of its hardware. Now, the majority of users have Nokia 6310i handsets. However, the main reason for the supplier move was timing.

"We were nearing the end of existing contracts and it made sense to centralise our suppliers and remove any inefficiencies in order to receive cost savings," said Ralph.

"We now have a single supplier, which brings us ease of relationship management. The savings will come from the benefits of scale by putting all the group's communications under one supplier and by reducing the rental costs and call rates."

However, the move is not just about cutting costs. Ralph explained that it has enabled the RAC to provide a company-wide handset refresh, a result of which has seen a change from fixed in-vehicle phones to mobile phones and car kits for the RAC's rescue fleet.

One danger of adopting a single-supplier approach is that a single point of failure is created. In the event of anything happening to the supplier, the customer can be left high and dry. In such a volatile telecoms market this is a key consideration but, although Ralph acknowledged this could be a risk, he is not overly concerned.

"Yes, we are putting all our eggs in one basket by proceeding with one supplier, but we have weighed up the risks and benefits and found in favour.

"Orange is a major international player and we are confident it is appropriate as a long-term supplier," he said.

Mobile phones have become an indispensable business tool for the RAC, which has a mobile phone in each of its roadside vehicles. This provides instant communication out on the road and improves the level of customer service.

The mobile roll-out has been staggered so RAC employees can be brought on board gradually with minimum disruption.

Ralph was quick to point out that other firms could realise similar benefits by renegotiating their mobile supplier contracts.

"This move has worked because the RAC has recognised the benefits of rationalising all the mobile telephony in the RAC Group," he said.

"The RAC is not unique in recognising this and, of course, change comes with a cost. However, this was understood and modelled into the projected savings."

Projected cost benefits for RAC
  • Expected cost savings of £1m

  • Standardised handsets and services

  • Reduced expenditure of time and money for training, repairs and end-user queries

  • Increased rate of mobile deployment (up to 5,000 handsets)

  • Orange is developing a bespoke electronic billing service for the RAC which will help it manage costs more effectively by drilling down into different divisions to perform cost analysis at any level.

Read more on IT legislation and regulation