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Stop Overspending on Telecom Services


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With new technology available in several areas—SD-WAN, XCaaS, and AI, to name a few—you might anticipate a consolidation of telecom services and cost optimization in your near future—and you’d be right. Savings are possible with these technologies, as long as costs are consolidated and optimized—and there are still more savings to be found.
Here are three examples of recent clients we worked with:
  1. One client used a national carrier for all their telecom services but spent more than three times their peer’s average annual telecom expense.
  2. Another client had moved many of their services to a new carrier but failed to disconnect many of the prior carrier’s services. The result was a 35% overspend (and now savings).
  3. Another client consolidated some of their services with a discount aggregator. However, they were still paying five times the best available rate of the national carrier.
You might think the days of saving money are long gone. At times, my colleagues and I have had similar thoughts. However, we continue to find savings with many of our clients. Sure, better pricing, alternative vendors, and new technology can account for some cost savings. But rarely are these the only reasons companies overspend. Below, we’ll review five additional possibilities:
  1. Most IT departments have higher priorities – Network security, core systems support, end-user support, technology evaluations, and regulatory compliance, to name a few. Telecom and billing services aren’t at the top of the radar.
  2. Carrier billing is often nondescript and confusing – Yes, many of these services are now available online through portals, but that doesn’t mean vendors do a better job explaining what you are paying for or describing their billing.
  3. Expertise – Many IT departments have technical resources. However, experts with financial analytics skills who also understand contracts, pricing, billing, inventory, and technology are in short supply and likely don’t understand taxes, fees, and surcharges.
  4. Communication – The team responsible for the billing often doesn’t communicate with the technical team. As a result, there are frequently services that should be disconnected and bills that should be reduced or eliminated entirely.
  5. Process – The process of reviewing pricing, inventory, contract expirations, etc., is often missing. Invoices often get a cursory glance. They could possibly be compared against a few prior monthly invoices. But there’s no real process to verify the inventory, pricing, contracts, etc., and as a result, companies end up paying significantly more than necessary.
You can better manage your telecommunications costs using the following services:
  • Consulting – Hire a firm to help you set up systems and/or processes
  • Audits – You could also hire a firm to perform periodic audits to keep your expenses in check.
  • Telecom expense management (TEM) – Larger enterprises can consider TEM firms to manage the inventory, contracts, and billing on their behalf.
Strategic telecom management – Some firms will manage your telecom services and your expenses for a fee and/or a percentage of savings. These firms can also advise you on industry trends, market vendors and help you solve business problems, which is a plus.
Going forward, many additional charges could require tracking – if you consider technologies like SD-WAN, multiple fiber circuits, broadband circuits, and wireless sim cards, this problem isn’t likely to go away. Furthermore, if you consider the cloud-based services you are currently paying for, these will only grow in the future and will need to be managed to avoid the same types of scenarios described above.

Keeping your expenses in check is a job—no doubt! However, without a good solution, you could be paying significantly more than you should. So this might be the time that you decide to find a long-term solution to this business problem and use those savings in other, more productive areas.

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Tim is writing on behalf of the SCTC, a 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.