Telecom Cost Control: Get the Most Savings for the Least Effort

Redundant lines, carrier overcharges and a myriad of other issues crop up in the course of managing a company's telecom costs. It's one area where there's always money that can be saved if you have the time and manpower to track it down. Many companies don't. Here are a few big-ticket items to keep an eye on if you want to save money, and it won't take you months to realize savings.

4 Areas Where Optimization Pays

Significant savings can be achieved by streamlining and calibrating the following resources:

Carrier Contract

At a minimum, telecom managers should review all carrier agreements every 18 months to two years. This includes a deep dive into discounts, pricing, rate, credits and other terms. It's worth the money to outsource this to an experienced telecom analyst since one discovery typically yields thousands of dollars of savings every month. They may also be able to effectively negotiate with your carriers for additional savings.

Subscription and Service

Nobody wants to do this job, but the more often you peruse the rolls of users and cross-check each line against a current employee roster, the sooner you stop paying for a line nobody is using. If your enterprise is a large one, this should be done on a monthly basis. Smaller companies with fewer company-owned devices might be able to do this three to four times a year without too much of a loss due to dead lines that haven't been reallocated or canceled.

Compliance Monitoring (This Has to Happen Real-time)

As part of the day-to-day accounting tasks, the billing or compliance team should be tracking billing accuracy and triggered overruns or discounts. Are the invoices correct? Did any outstanding corrections come through the billing incorrectly? Are you getting discounts you've earned on usage or upgrades? This also includes negotiated fee waivers that involve management intervention with the carrier.

Demand Management

If your company doesn't have a documented policy for device and service management, that's your starting point. An analyst with no customer-facing or after-hours responsibilities doesn't need the same equipment and service as a traveling VP who sleeps with their business phone within earshot. Department heads are typically the business owners of the telecom budget for their direct reports. This isn't always a great idea. Centralizing control over who gets what service and devices prevents generous managers from scoring employee goodwill on the company's dime. This works hand-in-hand with developing and documenting your business policy on the assignment of telephony resources. That way, nobody can claim they're receiving unfair treatment.

Based on these four categories, compliance monitoring and demand management yield savings of up to 10 percent. By comparison, contract optimization can save you up to 30 percent and subscription optimization gets you up to a 25 percent reduction in monthly charges.

Where to Invest for Additional Savings

More serious savings could cost some money before you see a difference to your bottom line. On average, about 50 percent of telecom bills contain errors that cost you 3 to 5 percent more than you should be paying.

A TEM (telecom expense management) service does this for you. TEM vendors check your carrier service fees, maintain inventory, automate billing and contracts, and integrate the telecom billing with your accounting system for tighter control. The TEM model has moved aware from cumbersome software upgrades to SaaS, which may cost you up to 2 percent of the telecom budget. Anyone who's gone through an unsuccessful, drawn-out implementation knows a good deal when they see one, and this is it.

A large corporation spending $20 million on telecom annually pays between $200,000 to $300,000 for a TEM service provider. The ROI here is likely to be at least $300,000.

Mobile Management

TEM pricing is often per device based on monthly billing and you may have to sign a multi-year contract. Bandwidth management can save you money if your company pays for one or more T1 lines. Instead of purchasing a second line when performance tanks, it's smarter to determine who's eating up your bandwidth and, when needed, issue cautionary notes on usage or limit access to the offending parties. (These employees could be streaming videos on a company-owned device on company time, so this could also trigger disciplinary action against deadbeat employees.)

Every effort you can make to reduce your telecom spend nets real money your company can gainfully invest in other areas.

Ready to make the most out of your IT budget? Let’s get started by building your telecom and technology inventory in our Clearview TEM portal and help audit and pay your invoices.

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.