Achieving $1.5 Million in Savings A Strategic Overhaul of Network Maintenance Costs
Executive Summary
In 2015, Rio Tinto faced mounting financial pressure to contribute to a company wide goal of $5 billion in savings amidst a dramatic drop in iron ore prices. During this period, a CMDB asset inventory exercise revealed a 229% increase in network maintenance costs due to previously unaccounted for assets. As the Service Manager, I led a strategic initiative to introduce a hybrid support model that combined third party maintenance with Cisco support. This innovative approach preserved critical asset protection while significantly reducing ongoing costs. The project was projected to save $1.5 million over three years, offering a sustainable and risk managed solution to a pressing financial challenge.
Background
The collapse in iron ore prices in 2014 placed the organisation under immense financial strain. The company set ambitious cost-saving targets, driving every department to rethink traditional approaches. As network maintenance costs soared due to the discovery of unregistered assets, the existing reliance on Cisco support was no longer cost effective. The challenge was clear, we needed to deliver meaningful savings without compromising the reliability of critical network infrastructure that supported global mining operations.
The Challenge
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The discovery of additional assets led to a 229% spike in anticipated maintenance costs, creating an unsustainable financial burden.
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Traditional methods, such as reducing support coverage, posed significant operational risks while offering only marginal savings.
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The reliance on OEM provided support was deeply ingrained, requiring a shift in mindset to accept third-party maintenance solutions.
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Ensuring buy-in from stakeholders across diverse environments, including remote mining operations, was critical for successful implementation.
Solution
Comprehensive Cost Review
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Conducted an in-depth analysis of Cisco maintenance contracts and associated costs.
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Engaged with the network team to identify high-cost areas and opportunities for alternative support solutions
Hybrid Support Model
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Developed a hybrid approach combining Cisco support for critical systems and a third-party vendor for non-critical assets.
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Conducted a Request for Proposal (RFP) to evaluate third-party vendors based on cost, reliability, and coverage capabilities.
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Negotiated a scalable, flexible contract to ensure long term cost benefits and operational stability
Stakeholder Collaboration
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Collaborated with stakeholders in mining operations, Operational Technology (OT), and commercial teams to ensure alignment with business requirements.
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Developed communication materials and workshops to educate teams on the benefits and implementation of the new support model
Implementation and Monitoring
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Introduced clear protocols for support escalation and asset management to ensure seamless integration of the hybrid model.
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Established regular review cycles to assess vendor performance and cost savings.
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Results
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Projected savings of $1.5 million USD over three years, significantly reducing the financial burden on the organisation. (in fact we saved more over the 3 year period)
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Maintained critical asset protection with minimal disruption during the transition to the hybrid model.
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Enhanced visibility of network assets through updated CMDB records and streamlined maintenance processes.
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Secured buy-in across departments, ensuring smooth adoption of the new model.
Insights and Lessons Learned
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The unexpected discovery of unregistered assets highlighted the importance of maintaining an accurate and up-to-date CMDB.
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Moving beyond OEM reliance required a willingness to explore innovative solutions and manage organisational resistance to change
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Early collaboration and transparent communication were key to gaining buy-in and ensuring a smooth transition.
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Long term financial considerations, such as post-project support costs, must be factored into initial budgets to ensure sustainability.
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Building strong partnerships with third party vendors ensured a reliable and cost effective solution that aligned with organisational goals.
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My Role
As the Service Manager, I was at the forefront of this transformative initiative. My responsibilities included
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Leading the review of Cisco maintenance costs and identifying cost-saving opportunities through a hybrid support model.
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Collaborating with the network team to assess the state of the infrastructure and define support requirements.
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Managing the vendor engagement process, including drafting the RFP, evaluating proposals, and negotiating contracts.
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Engaging stakeholders across the organisation, including remote mining sites, to ensure alignment with operational needs.
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Overseeing the implementation of the hybrid model, monitoring its performance, and ensuring its sustainability.
By balancing financial imperatives with operational needs, I delivered a solution that met cost saving targets while preserving the reliability of the network infrastructure.