The HFMA newsletter had a great article calling out the need for wireless expense management in its latest issue. This is a challenge we see as well, with our healthcare clients.
Industry stats show that healthcare spending on telecommunications is expected to increase by 44 percent over the next three years, approaching a cost of $12.4 billion by 2013. As newer and faster smartphones and tablets hit the market, monthly fees and data plans increase, and vendors merge and maneuver, the complexity of managing wireless gets harder every year. But there are a few things a CIO or telecom manager can do. Whether it involves using a wireless expense management software in house, tapping into telecom auditing services from an outside vendor, or a combination of both designed to fit your specific needs, there’s no reason to let it slide. We also recommend implementing a good wireless policy. You can download a free template from our wireless expense management page.
Savvy telecom managers can reduce costs 10-20% or more by carefully monitoring their invoices, renegotiating their telecom contracts, and creating a strong inventory to track both the devices and usage within their telecom stable. The more information you have, and the more visibility, the easier it is to manage.
Some simple tasks to take into account when managing wireless costs:
Get the right people in the room.
The group may include the CIO, a telecommunications manager, and representatives from supply chain or purchasing and finance. The group should begin its examination by pulling all relevant telecommunications contracts, invoices, and other usage records.
Ask the right questions.
Rather than focusing narrowly on cost per minute for cell phone coverage, broaden the examination to include all handheld devices used within the organization, including cell phones, PDAs, and pagers. For example, an organization might be able to eliminate the use of pagers if all personnel already have smart phones that can perform the same function.
Develop the spend profile.
The members of the work group should examine several months of detailed data to determine telecommunications utilization and cost drivers. Look at where duplication might exist, how usage varies by department and by individual, and who uses the services most frequently. If there are a handful of high users, they might be driving much of the overall spending. Adjusting those individuals’ usage or restructuring a contract to drop them to a lower tier of coverage may lead to significant savings. The work group should outline what types of devices are necessary for the organization to function and which carriers can provide the best service to meet these needs.
Address the culture.
Approaches to managing wireless device costs can vary significantly among organizations. In many organizations, policies exist, but are not routinely followed. Wireless devices are sometimes seen as an employee benefit rather than a cost of doing business. Employees should view their telecom expense not as an entitlement, but as use of an asset for which they are accountable. An organization’s policy should outline which employees need access to the devices, and consideration should be given to imposing an expense limit for certain employees or departments. Creating a culture that emphasizes responsible stewardship of resources, similar to management expectations of medical and clinical staff regarding supplies, can have a significant cost impact.
Mechanisms should be developed to track wireless expenses for each department and employee. If managers and staff do not know their budgets and costs, they will not understand where and why changes may be necessary.
Negotiate with suppliers.
Some suppliers will agree to change the presentation of their invoices to enable an organization to track and benchmark usage and spending. Also, as new devices and plans hit the market, it may be worthwhile to go back to suppliers to incorporate new savings opportunities.
Once the organization’s telecom expenses are carefully analyzed, solutions can be explored to meet savings targets. A wide range of options are available, from working with suppliers to adjust tiers of coverage to overhauling the organization’s policy so that coverage becomes an employee-borne expense that must be reimbursed. The approach and ultimate results will depend largely on the balance the organization is trying to strike.