Plugging the Asset Management Leak: Saving Money for Communications Companies

Communications companies face a tough challenge: reduce costs to remain profitable in maturing markets while continuing to invest in new technology in response to customer demands.

One way to add cash to the bottom line is to manage their assets as if they were inventory. Accenture’s experience shows that this approach can save the typical telecommunications company between $100 million and $200 million.

Companies in the communications industry are pursing cost reduction and better management of capital assets in a bid to remain profitable in markets that are now maturing. At the same time, however, they face continued pressure from customers to stay abreast of new technology—in other words, their capital expenses are increasing.

Many of these companies leak cash because of the wasteful way in which they manage their operating assets. In Accenture’s experience, a typical communications company with $20 billion in assets can add $100 million to $200 million by plugging this leak.

The hallmarks of effective asset management are:

• Understand the total cost of ownership. Successful companies approach operations assets with a view that encompasses the total cost of ownership—which most companies still view within silos.

• Manage assets like inventory. An inventory-oriented approach to managing operating assets complements a total-cost-of-ownership view. All too often significant resources are wasted because a company can’t efficiently order or replace needed assets.

• Plan systematically. A systematic approach to managing operating assets holds the effort together.

That approach marries inventory management discipline with the collaborative nature of sales and marketing planning—seeking input while driving common understanding, objectives and buy-in.

The benefits include reducing network downtime and improving the use of working capital. Barriers include information gaps, technical barriers, process limitation and organizational misalignment.

Companies that successfully overcome the impediments to effective operating asset management transform how they view and manage these assets. In particular, the operations organization adopts new approaches, tools and processes that create an enterprise-wide capability:

• Organizational alignment. Eliminate the organizational silos and implement common metrics and objectives.

• Collaborative planning. Here, too, common metrics and objectives play a key role. The approach should mirror traditional sales and operations planning techniques.

• Fine-tuned logistics. Companies that excel at operating asset management are not only able to track and deploy assets, creating well-oiled warehousing and delivery networks that can respond quickly.

• Technology. Successful companies avail themselves of systems that provide complete, consistent information on assets. They use technology to eliminate any information gaps.

Thomas Jones is a senior manager in Accenture’s Communications, Media and Technology group. He has worked at multiple asset-intensive clients in the communications industry. He has significant experience in asset management, planning, supply chain transformation, inventory management, sales and operations planning and network optimization.

Steve Ambo is a senior principal in Accenture’s Communications, Media and Technology group. He has developed supply chain and business strategies for some of the leading communications companies in North America. He has extensive experience in asset-based supply chains such as network infrastructure and customer premise equipment.