subject: Telecoms Cost Saving, Expense Management, Cheaper Call Tariffs by:Richard Hodgson [print this page] If your personal mobile or landline provider routinely added 10%-40% to your monthly bill we dont think it would be long before you asked for a rebate. Surprisingly, very few businesses have acted to make telecoms cost savings, despite the fact that for many, telecoms comes second or third to staff costs in terms of total spend.
Telecoms Expense Management is a term used to define a process to check and verify voice, data and mobile comms bills; create an asset register to ensure that all circuits and services are being utilised; and to provide a price control mechanism to aid procurement.
What are companies doing to introduce TEM to make telecoms cost savings? A number of companies are leading the way and of course, as with most technologies these are based in the USA. Telecoms Expense Management is an established, billion dollar industry in the States. Major US corporations like American Express and Bank of America are rolling out comprehensive Telecoms Expense Management solutions across their global networks.
By comparison the UK is significantly behind as there is no clearly defined market for Telecoms Expense Management services here. Organisations have utilised call management software (relying on PABX data only) to log their calls and use this data to check their billing to see whether they are being overcharged. They have not necessarily made an assault on all other aspects of verifying costs to make telecoms cost savings. For example, larger organisations with multiple sites across the globe, in the process of growth acquisition are unlikely to have a centralised asset register of all their telecoms and data circuits and services. The fact that they are using numerous suppliers based upon local purchasing decisions does not help their cause either.
Some consultancies are willing to manually verify billing using spreadsheet tools only, for analysis. They will then attempt to use this information to recover monies that were overcharged. Some companies are zealous in carrying out this type of analysis but only in order to persuade you to use their preferred network provider for all your future calls, making them biased.
Telecom costs typically equate to 3.6% of a typical companys entire P&L spend which would explain why telecommunications expenditure remains near the top of every CIOs expense list (Gartner) and why Telecommunications cost management has become one of the hottest sectors in todays business process automation marketplace. (Aberdeen Group)
More than 50% of large enterprises dont know what they are spending on telecom related services across the company. In fact, this area is so wrought with inefficiency that most people dont know how much they spend on telecom services, never mind how they can best manage those budgets. (Aberdeen Group)
Whilst it is a proven fact that network providers do overcharge because they make errors in their billing, it is critical that an organisation has a way to first check their telecoms inventory in terms of what they currently possess and then more strategically, in terms of what the business requires as time goes by first so they have a basis upon which to negotiate reliably.
Larger organisations are constantly evolving to maintain their competitiveness as economic cycles occur or market share fluctuates, for example. Additionally some assets have been purchased only for historical reasons, or indeed as a part of a package to secure cheaper pricing as a part of a promotion that no longer exist. Between 15% and 35% of all fixed telecoms assets are surplus to requirements. The number of lines being paid for rarely matches the number an organisation requires.
This is where a Telecoms Expense Management service provider using Software as a Service (SaaS) can help. This allows remote access to powerful data warehousing plus number-crunching tools capable of retrieving data from all your service providers; and then comparing millions of lines of billing data against your contracted tariff in a matter of seconds. Numerous reports are then made available to determine actual usage and cost. This activity alone can identify 10% overbilling and frequently much greater, irrespective of the supplier and all without involvement from internal resource allowing your internal telecoms, purchasing and accounting staff to spend time on other projects.
Telecoms Expense Management is therefore a vitally important service that will maintain an asset register in addition to providing bill management. Furthermore it offers a tremendous advantage in telecoms procurement by ensuring services are purchased at the best market rates.
It is also good to realise that unlike most telecoms systems Telecoms Expense Management does not require a capital investment. These systems are typically charged for out of the cost reductions realised and therefore offer a no risk opportunity to gain control over your organisation's telecoms expense.
About the author
Richard Hodgson formed Telweb Communications to practice Telecoms Expense Management, advising larger organisations on how to reduce voice, mobile and data costs; and how to enable executive decisions to justify investment in new technologies to make further cost savings and provide greater efficiency.
Telweb Communications Copyright 2009
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