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Telephones are sooo 1970s. The Salvation Army, however, is using phones in a very twenty-first-century way, thanks to outsourcing.

Most Americans come in contact with Salvation Army volunteers, who indefatigably raise money at the front doors of retail establishments at Christmas time. "Our strength is our presence on the ground all over the place," says Clarence White, Chief Information Officer, Western Territory for the Salvation Army, which encompasses 13 western states as well as Micronesia and Guam. His territory has more than 9,000 employees in hundreds of centers throughout the region.

Communication had become a corporate challenge for the charity. "We tried all kinds of technology" but found voice was the most effective arrow in the arsenal. At a professional networking event, White met a representative for Free Conference Call. Today, over a year after using its services, he says "it's the best way to use an old communication tool." And while the calls are not free (unless you're using free cell phone minutes), they are appreciably cheaper.

Here's how it works. The Long Beach, California, corporation owns its own network. Free Conference Call assigns each outsourcing buyer a long distance number located in a rural location--typically Iowa, Nebraska, and South Dakota--which receives very little traffic compared to the phone lines in Long Beach. The owners of the public lines, like Sprint and Embarq, pay Free Conference Call a marketing fee to drive traffic to those low-use areas. They have a cost to maintain these lines, so they need traffic on them to remain competitive.

Customers are actually using VoIP (Voice over Internet Protocol); the phone signal goes from Free Conference Call's network to the public switch via a gateway.

Big Savings

Before using Free Conference Call, the Salvation Army paid eight cents per person per minute for its conference calls using its former carrier. But regular long-distance calls are only 1.9 cents on the public network. The offices could use the cheaper rate, but the Salvation Army locations could only dial in at the more expensive rate. Now they can dial the gateway, so everyone can bill at the same lower rate. "This is obviously much more cost-effective for us," says White.

Some of its buyers were paying as much as 32 cents per minute before switching suppliers, notes Noelle Resare, Marketing Director, Free Conference Call.

"Their only other option to stop paying eight cents a minute was to own their own conferencing equipment. Now they don't have to manage any equipment or a network," says Resare. "This is the ultimate in outsourcing: no supplier cost."

The supplier gave The Salvation Army its own private conference bridge number. The Salvation Army made each employee's access code the same as their business phone number. "We didn't have to create a new phone number scheme. Yet, at the same time, we know each user number is unique," says White.

He says they rolled out the new conference calling plan with "zero effort." Resare says Free Conference Call handles 5.5 million calls per month yet only has five customer service representatives. "They don't get a lot of calls," she says.

Adding New Technologies to Telephony

Outsourcing has had other benefits besides significant cost savings. "The technologies we can combine with this are much more enticing," White explains. The Salvation Army has a meeting room platform for Web conferencing, which is free to all users. Now the charity can have Web-sharing meetings.

It is also using motion video. "It's the same technology as cameras at parking lots. We have moved security video technology into the board room" using 42-inch LCD monitors, says White. "Now we have voice, full-motion video, and Web meeting room technologies."

In some meetings, the Salvation Army operates all three concurrently. "Meetings grab all the senses," he says.

The assembled mixed media is "as simple, cheap, and effective as more expensive solutions," White notes. "When we have a meeting, we just publish the phone number and stay out of the way."

White points out he was able to do this with a previous provider, but it was a paid service.

Managing telephone costs has been easier since now each local office may have to pay a few dollars instead of a few thousand dollars each month. The bills are much easier to decipher since he just has to pay one long-distance toll charge.

Resare says some of Free Conference Call's buyers use the service for training. Podcasts are another use. The provider also offers a toll-free version, which has a cost.

Lessons from the Outsourcing Journal:

• An outsourcing provider sending calls to rural areas can offer conferencing services for free to its buyers, who just have to pay the standard long-distance phone rate. This can reduce costs from up to 32 cents a minute to just one cent.
• Buyers can add other technologies to the service, including full-motion video and Web meetings.

Publish Date: October 2007

Copyright © 2007 - Everest Partners, L.P.

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