Enabling Smarter Renewals for a Global Telecom Enterprise with Strategic Benchmarking
Global telecom enterprise asks HFS to lead finance benchmark and advise on renewal opportunities
Business Challenge:
A G50 telecom enterprise was halfway through a seven-year contract with a Big 4 provider for global tax and compliance services across 130+ countries. Despite initial cost savings, the client was not seeing the expected financial benefits or the promised shift to automation. With the contract locked into a fixed fee model, there was no incentive for the provider to automate processes, leaving the client dissatisfied and frustrated.
HFS was brought in to benchmark the client’s processes and provide expert advice on approaching the marketplace for this critical service renewal.
Comprehensive Solution:
HFS leveraged its enterprise research and advisory expertise and partnered with APQC (American Productivity and Quality Center), the leading authority on process benchmarking. Together, they conducted a custom survey of global enterprises similar in size and scope to assess delivery models for tax and compliance services.
- Regional and Global Analysis: HFS evaluated the client’s operations by comparing costs and service models for direct tax, indirect tax, and compliance services, broken down by country and region.
- Peer Benchmarking: The client was compared against 40 similar enterprises across various industries, providing a comprehensive view of where their tax services stood in the marketplace.
Business Impact:
HFS’s benchmark and recommendations provided the telecom enterprise with valuable insights for its service renewal strategy. Key outcomes and recommendations included:
- Standardizing Tax Processes: Addressing non-standard tax processes to better understand digitization efforts.
- Optimizing Reporting Entities: Reviewing the necessity of multiple reporting entities in countries with limited business activity.
- Contract Review: Revisiting the current contract to fully identify the efforts needed to digitize manual processes and migrate them onto the provider’s tax platform, reducing expenses.
- Considering Combined Tax and Data Firms: Advising the client to explore combined tax and data firms for their renewal to align skills effectively and lower costs.
By following these strategies, HFS estimated the client could reduce annual expenses by 20%.
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