How to Use Benchmarking to Reduce Telecom Costs

Benchmarking is an extremely helpful process for companies as they prepare for a Telecom Request For Proposal (RFP). However, many organizations don’t take advantage of it?

Benchmarking is well worth the effort and cost to obtain assistance from a Telecom Expense Management or IT/Telecom Consultant to provide benchmarking on your existing telecommunications services. Not only can it provide you with a clear picture of where your services can be from a pricing standpoint, but also help you make RFP savings estimates by service type. This can further allow you to provide direction of where to apply the most effort during the RFP and telecom contract negotiations to maximize strategic cost reductions. It’s always good practice to have goals for how you would like your pricing and contracts to look when the RFP efforts are completed. Here are some tips on what to expect from the benchmarking of specific services.

Local Services

These LEC services, including POTS, PBX Trunks, DID Trunks, Centrex, PRI T-1, Point to Point T-1, Analog circuit, etc., are all benchmark dependant on location. With the local POTS, Trunks, and PRI’s you’ll be able to have a nice range within each state of what the pricing would look like on the low and high ends. Keep in mind that some circuits such as Point to Point T-1’s often have too many variables to get that detailed, such as, the specific end point addresses, mileage between them, and distance from the LEC Central Office.

Long Distance

The pricing here is more of a commodity, and typically will have a fairly close range of what can be expected based on your volume. It’s especially important to have solid benchmarking on the International and Instate rates, as that is where the vendors often have the most variance in pricing.


This benchmarking effort is largely based on location and discounts provided. There’s typically a fairly large range here depending on service, size, and other specific variables.


Benchmarking of Wireless services such as, Cellular, Data Devices, Aircards, and Telemetry, is typically based off of a few metrics. Cost per minute, cost per KB/MB, and cost per device. Benchmarking here can be very accurate based on device quantity and discounting structure.

I encourage you to take advantage of the valuable tool of benchmarking when you are planning you’re next RFP.

Let the experts at Valicom take your business cost reduction to the next level!

About the Author: Jeff Poirior

Jeff brings 25 years of telecommunications and information technology management experience in voice and data networking, server support, and telephony and security; with a significant emphasis on customer service. Prior to joining Valicom, he was chief of the infrastructure support section for the Wisconsin Department of Transportation. Jeff was the vice president of operations for CC&N, overseeing telecommunications, help desk, data and desk side support services. Prior to that, he served as the associate director of technical resources for Covance, responsible for managing systems and network operations supporting 1700 users in Wisconsin and Virginia. He has also led data center operations at Magnetek Electric, supporting mainframe systems, client/server applications, telephony systems, and computer-aided design. Jeff holds a bachelor’s degree in business administration from Cardinal Stritch University and a master’s degree in business administration from University of Phoenix. In addition, Jeff is a past board member of the Wisconsin Telecommunication Association.