For both Fortune 500 firms and small businesses, managing
telecom costs can be a daunting task. Companies often use many
different telecom and network services and receive hundreds or
thousands of invoices each month.
How can a company maintain visibility into all these business
expenses? In other words, how can a company avoid losing track of
the telecom forest for the invoice trees?
The answer is to employ the services of a telecom cost
management provider. Not only will doing so greatly simplify
management, but also will save the business as much as 25-35
percent in telecom expenses.
How are these savings realized? In many cases, simply by
correcting billing errors. By some estimates, more than half of
all telecom service invoices contain some type of error. These
errors can result in companies paying 5 to 7 percent more than
they should. Finding and correcting these errors alone, though,
often is not worth the time spent on the task when businesses try
to tackle the problem on their own. A telecom cost management
company can make correcting errors cost-effective through a
process called validation.
Effective telecom related service and equipment inventory
management is another important key to most Telecom Cost
Management Solutions. An enterprise is not a static entity. In
fact, most changes to an organization require some change in
telecom services i.e. office, staff, organization, location or
business changes, without a TEM system which can automatically
identify each line item of the invoice against your inventory.
I.e. if operations or H.R. removes a service items such as a cell
phone, conference bridge, calling card, circuit, data element
etc… it should reflect on the invoice. Only a good Telecom
Management System can track these changes effectively. The over
spending caused by unneeded services, averages between 12-20% of
a company’s entire telecom budget.
Savings can also be realized through optimization processes.
This involves examining all the different services and providers
used, and selecting the most cost-effective rate plans. Most
companies do not have the internal resources needed to perform
this optimization process. Instead, it makes sense to assign this
task to a telecom cost management provider. This provider will
take into consideration all communications-related
services—including mobile/wireless, long-distance, local
phone, conferencing, virtual private network, PBX, e-mail,
voicemail, and so on—and advise the company on the optimal
business decisions needed to minimize expenses.
Finally, companies can save money on their communications
spend by outsourcing the management tasks involved to a telecom
cost management provider. Outsourcing non-core business processes
makes sense from a return on investment (ROI) perspective, since
a variety of telecom-related tasks have become quite burdensome.
Some of the processes that a company may choose to outsource
include pricing and contract negotiations, service level
agreement (SLA) enforcement, and dispute management.
Taken together, these three ways to save on communications
expenses—validation, optimization,
outsourcing—constitute what’s known in the industry
as ‘total telecom cost management,’ or TTCM. This
holistic approach to communications expenses focuses on the
bottom line by determining the best way to trim expenses without
sacrificing functionality. In fact, trimming expenses through
TTCM offers the advantage of helping companies become more nimble
and competitive.
Considering the fact that a mid-market enterprise spends
about $26 million each year on telecom services (figures from a
recent Optelcon white paper, cited from Aberdeen Group research),
and the average Fortune 500 company spends $116 million each year
on these types of expenses, it seems clear that the time to
implement TCM is now.
Given the amount of average savings generated, the net present
value cost of inaction or doing a 3-4 month RFP is far greater
than the 3-5% you may save by performing an RFP. Most TEM
companies have very competitive pricing to begin with.
Bob Pommer
CEO
Optelcon
bobpommer@optelcon.com
http://www.optelcon.com
1-877-Optelcon
