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Poor Telecommunications Management Can Cost You

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It’s never a bad time to review your organization’s communications technology expenses, and never a better time to enlist the help of a specialist. That’s because there are certain milestones when not having a good handle on spending and inventory can result in the greatest financial risk.
The following list was prepared by the Audit and Expense Management group of the Society of Communications Technology Consultants (SCTC) and demonstrates 10 scenarios in which to consider telecom expense management.
  1. Before a move - Are your inventory records accurate and complete? If not, you risk overlooking the relocation of a critical service to your operations. If inventory records are outdated, your firm could be paying to relocate services that are no longer needed. Additionally, once services are removed, evidence of existed billing errors is also gone, making recovery for an error unlikely.
  2.  Following an acquisition or merger with another company - Even if your own expenses and inventory records are in order, when you merge, acquire a new company or location, it’s advisable to look at their expenses and records. Inventory status can pinpoint many different unneeded services, particularly if a new company’s personnel move into your premises. Cost reduction opportunities may present themselves immediately, and a communications expense management consultant who knows what to look for will identify them readily.
  3. After closing a site - You may be surprised to learn that your organization is paying for services that should’ve been disconnected years ago. If someone canceled those services, it’s not guaranteed that they disappeared from the bill. Communications service providers are known to process orders, but never submit them to the billing department. A communications expense management specialist can be invaluable in taking the time to deal with the telecommunications service provider to identify and resolve these issues.
  4. Before and after contract renewal with your communications service providers - Contract renewals often focus on rate reductions or improving services, but other savings opportunities may be available. A communications expense review ensures that only necessary services are renewed. After a new contract is implemented, an expense review is still advisable, since 60% of the time the implementation goes awry on billing issues. Also, contract terms dictate how much time you have to report a billing error after which you cannot obtain a refund.
  5. When regulatory charges change - Regulatory charges, whether government-mandated or not, represent an increasing proportion of many communications technology bills. The Universal Service Fund charge is a percentage of the monthly billing for services that cross state lines in the U.S., and recently grew to over 31%, increasing the cost of those services by one-third (it changes quarterly). Other regulatory fees vary by state. Your service provider representatives aren’t typically well-versed in what these charges are, and whether they’re being billed correctly. A review of communications technology expenses will help identify these costs and question whether they’re appropriate and accurately applied.
  6. When moving from on-premises to cloud-based services - Technology changes take on many forms. One example is moving from a premises-based telephone system to a cloud-based system. The expense review is key for tracking whether anticipated savings are being realized, and an accurate inventory is required to ensure that all unneeded services are removed, and billing has stopped. The inventory also identifies services that may need to remain or require special treatment such as alarm and elevator lines. Another aspect is determining which parts of your premises-based telephone system will remain and ensuring that any licensing or maintenance charges make sense based upon a pared-down or entirely removed system.
  7.  When transforming network technology - Many organizations are moving to newer more cost-effective technologies. For example, when moving from the older multiprotocol label switching (MPLS) services, billing must be reviewed by a communications expense management specialist who has experience interpreting the complex and confusing terminology on the bills. MPLS billing typically involves multiple components for each site, so it’s not uncommon for some components to remain in billing ever after a site has been moved to the newer technology.
  8. When a new person takes responsibility for communications technology management - When a new person takes over, this can be a good time to conduct a review so they can start with a clean slate both for billing and inventory accuracy. An assessment can also help them gain a better understanding of what the organization is buying and how it’s being used. In many cases, the person responsible for expenses is different than the person responsible for updating inventory records. In either case, a new face can present the opportunity to suggest a review.
  9. When switching data center providers - Moving from one data center provider to another is another good time to take a look at your current expenses and inventory—not only as they pertain to data center billing, but also the services that will be relocated to the new data center. Some questions to answer include: Are all services needed, will the billing process change, and are the new bills after the move accurate? Maintaining an inventory of data center services is also important from a billing and service standpoint.
  10. When employees work from home - With more employees working from home, telecommunications services at the office should be reevaluated for necessity. Mobile expenses should be reviewed since COVID-19 has brought about many changes, some of which may be permanent. A communications expense management specialist can explore and help to optimize these areas.
To learn more about what the Audit and Expense Management group of SCTC can do for you, visit our website, select the ‘Find a Consultant' drop down, select ‘Expense Audit/Management,’ and search.
Learn more at Enterprise Connect this September in Orlando, Fla. Register with promo code NJAL200 and receive $200 off your registration. For more information about cloud service cost management, attend the How to Reset Your Communications Budget & Expense Strategy session.

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The SCTC is the premier professional organization for independent consultants. Our consultant members are leaders in the industry, able to provide best of breed professional services in a wide array of technologies. Every consultant member commits annually to a strict Code of Ethics, ensuring they work for the client benefit only and do not receive financial compensation from vendors and service providers.