There are many myths and misconceptions which lead many
companies to believe that they are powerless against this
exploding use and expense of mobile phones and devices. In this
blog, we are going to try and clear up some of these
misconceptions and show enterprise companies how they can
effectively manage, what is believed by many, to be an
unmanageable situation.
Misconception # 1 – I have already negotiated a great
corporate contract.
Answer: Having a corporate contract provides companies with a
number of benefits which include; no early termination penalties
for devices under the contract, Volume discounts and other
assorted terms. They also provide the enterprise with a false
sense of security as well. These volume discounts are almost
always based on the total dollar volume spent and not on the
individual rate plans underneath its umbrella. By optimizing the
individuals rate plans the discount will applied against a
smaller gross number thus significantly reducing your cost.
Typical corporate contracts provide between a 12-20% discount off
of the total bill. Optimization can yield an average of an
additional 25% savings. In short even companies with the best
large corporate contracts can benefit from optimization services.
Misconception # 2 – We have a pool of minutes and thus
we don’t need to optimize.
Answer: Pooling plans can provide companies with significant
benefits however they can also provide a false sense of security
in cost of use. Pooling is incredibly complex. Carriers do not
just provide you with one big pool of minutes. In actuality a
pool is made up of the sum of the individual contributing plans.
This means each user either gets a plan which has a certain
number of included minutes which other people can share or they
get a “bolt-on” plan which does not contribute
minutes, but they can take from the contributing minute plans.
There are hundreds of different variations of pool plans which
have different rates for data, night/weekend, roaming,
international etc… If you company has 1000 users, the
collective pool plan will have 1000 individual plans which make
up the total. In addition as your company’s usage grows or
contracts, having the wrong pool plan can actually cost you
significantly more than if you were on individual plans. Using a
professional mobile optimization company with access to the
thousands of rate plans and the algorithms to systematically
analyze these different variations and combinations will assure
you are getting the lowest cost per minute overall. On average,
even companies with pooling plans can cut their usage costs by
over 25%.
Misconception # 3 – I don’t have to worry about
it since I have my employees own their own phones and expense
their business calls.
Answer: Due to the speed in which mobile phones have taken over
telecom, many companies still allow their employees to own their
own phones and expense their charges. This equates to waiving the
white flag and believing it can’t be managed effectively.
Although this removes the burden to manage it, it creates a
number of problems including: 1. Individuals are paying rates
which tend to be 20% higher than corporate plans. 2. Very little
visibility and accountability. 3. Often miss allocation of
expense. 4. Management does not have the time, or tools to manage
effectively 5. Corporate liability, if your employee leaves the
company, they take with them the number, their phone and quite
possibly your clients. Just as you would not allow everyone in
your company to buy their own computers, desk phones, internet
access, local phone service, 800 numbers etc… and just
expense it, cell phones are no different. Quite often the reason
for this behavior is that management feels they don’t have
the experience, resources or tools to manage this growing
problem. In the past several years, there have been new breeds of
firms, with new technology, processes and expert advice which can
allow you to manage a very large expense just as you would
others. Everything from procurement, helpdesk, reporting, and
policy management is available. Typically for just a few dollars
per month per device your company can get control and reduce
overall costs by more than 25%.
Misconception #4 - My vendor takes care of that for me.
Answer: “The wolf is guarding the hen house”.
Although there are some good account managers and well meaning
people, asking your vendor to reduce the revenue they receive
from you is an inherent conflict of interest. Ask yourself if
your company would train each of your account managers to contact
every customer monthly and tell them how to spend less money with
your company? In most cases even the best account managers only
have access to the same rate plans and web interfaces that you
do. Using a truly objective mobile management company which is
not compensated by the carriers is the only way to know for sure
that you are getting the best deals. Using a professional mobile
management firm, will enable you to keep your vendors honest.
Misconception #5 – I don’t want to have to change
carriers and phones and coverage areas to save money.
Answer: By utilizing a professional mobile cost management
company you do not have to. Optimizing your rates based on your
specific usage patterns by using the latest computer algorithms
allows you to keep your existing provider. Stay away from any
firm which advertises optimization but recommends switching all
your phones to another carrier. Chances are they are getting paid
by that vendor. If you use the right company to do this, the only
thing that changes is the lower bill the next month.
Misconception #6 - I have a department which handles that.
Answer: Even companies with the largest telecom staffs can
benefit from bringing in an outside professional Mobile Cost
Management company. Most companies manage the costs on excel
spreadsheets and are doing it along with many other jobs. A
professional management company uses rate plan algorithms which
compare your usage patterns against over the 10,000 available
rate plan variations and pool plans. The combination of the
technology and industry insiders will provide your existing
telecom team the tools to do be more effective.
Misconception #7 – We manage it pretty well, how much
savings could there be?
Answer: A lot. On average each user spends approximately
$100/month on mobile service. On average, a professional
management company will reduce this cost by 25% or greater. This
means: Monthly savings = $100 x .25% = $25/month per device or
$300/year savings per device. 1000 devices equals over
$300,000/year in savings with relatively little effort by the
company. If a company operates on a net profit margin of 10%,
every dollar saved is equal to $10 in new sales. 1000 devices =
$300,000/year in savings or the equivalent of adding $3,000,000
to the top line. Is it worth spending an hour of your time to
look at this? You bet. In closing, getting control of both your
spend and your processes is a very attainable and relatively
quick and easy solution. By using a professional
Telecommunications/Mobile Cost Management company, you can take
advantage of lessons learned by others, use proprietary
technology, dramatically reduce your costs and improve your
processes. Thinking this challenge going to go away is simply
denial. There are several firms which provide these services in a
similar competitive manner. Our recommendation is to find one
that you like and just go with it. Developing and managing and
closing an extensive RFP, can take 3-6months. Every month you put
this off is costing you an average of $25,000/month/1000 devices.
The extra couple of thousand dollars you save by doing the RFP
will end up costing you significantly more at the end of the day.
Bob Pommer
CEO
Optelcon
bobpommer@optelcon.com
http://www.optelcon.com
1-877-Optelcon
