Outsourcing to save Kelly Services $13.5m?

Recruitment agency Kelly Services is aiming to save $13.5m by centralising and outsourcing its European voice and data network.

Kelly Services signed a $12m deal last summer for virtual network operator (VNO) Vanco to manage a pan-European WAN connecting 310 sites in 16 countries.

That deal has just been extended to outsource Kelly Services' fixed-lines, mobile handsets and PBX (internal phone systems) in Europe, bringing the total value of the contract to $26.2m over five years.

Jason Jennings, European IT director for Kelly Services, said the latest deal will cut the company's voice costs alone by 20 per cent, with estimated savings of $2.7m per year over the lifetime of the total contract with Vanco.

He said: "We wanted to reduce our operating expenditure. We have reduced headcount - the guys I used to have manage my network now work for Vanco and we have significantly minimised our supplier overhead."

Jennings said the project to create a European WAN is 90 per cent complete.

The VNO model pioneered by the likes of Sirocom and Vanco is essentially the reselling of network capacity to customers at the lowest price by passing traffic around different carriers and is challenging the traditional model of asset-heavy telcos such as BT.

Allen Timpany, CEO and founder of Vanco, said: "It's not about technology, it's about driving costs down."