PUBLIC FINANCE/Outsourcing eases bill payment problems

Every month, Bryan Richison, a financial analyst for Douglas County, Colo., receives bills for 621 individual telecommunications services, including local and long distance telephone, Internet access and wireless services. Those services currently support the county’s 200,000 residents and are expected to expand steadily as the county’s population increases. The analysis necessary to decipher that many accounts could be a problem, but Richison is unfazed.

The county made Richison’s job a little easier when, in 1998, it decided to outsource the cost management for its telecommunications services to Castle Rock, Colo.-based MSS*Group. The company analyzes every telecom services bill, identifies errors, corrects inaccuracies and presents the county with a consolidated bill for payment. It charges a fee based on volume and bill type and returns 100 percent of the recovered savings to the county.

Richison estimates that the contract saved the county $19,000 in the first eight months of 2001 alone as a result of error corrections, location of missed credits and elimination of incorrect charges. He also says that the amount of time his staff devotes to manual processing of bills has been cut by as much as 20 hours a month. Additionally, the company maintains a database that allows it to track the county’s telecom services spending trends.

Prior to outsourcing, the county relied on a laborious, time-consuming process to analyze and pay its telecom charges. Individuals in as many as 30 departments had to review their department’s bills each month and submit vouchers to the county’s accounting department. Employees in the accounting department then re-reviewed the bills before processing them for payment.

However, because bills had to be paid quickly to avoid late fees, review time was limited, and the staff had little time to keep up with the complexity of the industry and its changing rules. Keeping up with industry issues, such as “slamming” (service changes without permission) and tax exemption laws, ensured that the county was not overpaying for its telecom services. That kind of information also was necessary for the county to make long-range plans and forecasts.

“We’re not trying to be in the telecommunications business here,” says Richison, who describes outsourcing as a “time shifting” device that frees his staff members from the tedium of processing and allows them to focus on management and decision-making.

With cities and counties looking for ways to manage and cut costs, outsourcing functions not “inherently governmental” makes sense, according to Richison. “We know when we get our bills back, they are accurate,” he says. “No worries, no pain.”