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How to Master Your Telecom Expenses
An article about controlling telecom costs may not seem cutting-edge in 2023, but these strategies can save you money and make a huge difference to your business.
Controlling costs associated with telecom, an essential business tool, is one of the easiest and fastest ways to pull your costs into line and allows you to reallocate those dollars elsewhere in your organization.
In my consultancy’s time dealing with telecommunications environments, both as a seller of and a buyer of telecom services, we’ve gleaned a lot of great strategies we’d like to share with you. Because we know how telecom companies structure their pricing and billing, when and why they make pricing adjustments, how often telecom billing contains errors, we offer these ideas to you.
We also know that many organizations employ the “one and done” method of choosing telecom services, i.e. sticking with one vendor and not mixing and matching depending on the service. It’s so easy, once you’ve been through the technology and vendor selection process, to set the results aside and move on with more pressing issues. However, because technology tends to evolve, and prices change frequently, it’s critical to think like a new customer from time to time instead of treating your vendors like comfortable old shoes you’ll never throw away.
Below are some time-tested strategies for keeping your telecom spending on a straight course.
Start With a Thorough Telecom Inventory
First, because it’s important to know where you are before you decide where you’re going, consider creating an inventory of telecom/datacom assets. You can do this by documenting all of your bills into a simple spreadsheet.
When we work with clients in this way, we gather all the bills, record all of the services being paid for and indicate where the services are being used. We record the supplier, service type, install location, contract expiration date and monthly total cost. This exercise not only helps us understand where services currently are, it also shines a light on opportunities for optimization such as replacement of outdated technology (think POTS lines and DSL!) or instances where a service is no longer needed (“We moved 2 years ago!”).
Also, don’t overlook your wireless environment. These little pocket devices can, if left unguarded, really rack up cost waste in your telecom expenditures. Add wireless costs to your inventory as well, so you have a full picture of everything you are paying for.
Creating this document can help an organization get visibility and control over telecom expenditures.
Next, Review Contracts to Determine Whether Your Costs Can Be Changed
Now that we know where we are, we can confidently move forward. The inventory we created will serve as a guide and reminder of what we have and what we need. If we discover that there are services which can be replaced with more efficient and less costly options, we deploy those services and update the inventory accordingly.
One way in which we can effectively manage the telecom expenditure environment is to review contracts. Because many companies deploy the “one and done” method of selection, the contracts we enter into with suppliers can become outdated. Two things can happen when contracts are outdated and both can hinder your progress to cost optimization.
The first is that the contract can auto-renew. This can be problematic if your service pricing is outdated because the supplier will apply a cost penalty should you choose to change suppliers. By default, many suppliers include an auto-renewal clause in their agreements, so it’s important to review your contracts annually to see whether this clause is already there or whether it’s been added.
The second thing that can happen is that the contract expires and suddenly, your pricing has ballooned into the “month to month”, or “retail” category. While this gives you freedom to move to a better cost model, it also can cause you to pay more while you work toward a new agreement.
Another way we can control costs is to review the invoices for inaccuracies. It’s not uncommon for suppliers, especially if they have merged with their competitors at some point in the past, to have billing errors. We see this most often with aggregators - i.e., those suppliers who pay bills on your behalf to underlying providers. One client we supported experienced new billing errors each month with their aggregator. Aggregators and resellers aren’t the only suppliers who can suffer billing errors and it’s important to stay on top of all invoicing reviews.
A secret weapon in the fight against cost waste is reporting, especially for wireless services. Suppliers offer a variety of reports on their portals which allow you to see where you have opportunities to trim back unneeded or unused devices. We call the unused devices “zero use” devices and an excess of these devices in the environment is an extremely common problem. As we know, those little pocket-sized nuggets of cost can hide in desk drawers and in lost and found bins. If we know what devices are unused and/or unneeded, we can eliminate them. A large food services company we worked with had experienced $12,000 per month in zero use devices, and at a time (during Covid-19) where the reduction in office worktime and travel had significantly impacted their revenue stream. Eliminating those device costs helped them stay afloat until the effects of the pandemic eased.
Wireless provider reports also alert us to excess data use. We recently worked with a client who discovered one of their employees streaming sports content while on breaks, which resulted in a $10,000 overage chargethanks solely to that one device’s activity in one month. Staying on top of reporting can help eliminate those surprises.
Finally, don’t be shy about going shopping! While it can seem like an arduous task, it can reap huge benefits, even if you don’t change suppliers.
In the journey to the perfect telecommunications environment, consider keeping these factors in mind. It’s not just about making a choice; it’s about keeping good records and forging a partnership with your providers that will support your business goals and aspirations.