In our November 2012 issue of The Net Effect, we published a White Paper titled “Top 10 Reasons Why Clients Spend WAY TOO MUCH...For Telecommunications”. This is the second in a series of blog entries that will explore each of these topics in more detail, moving on to #9 Unused Services.
If you consider the volume and multitude of service types of telecommunications consumed by the average enterprise and then factor in the number of telecommunications suppliers that make up the typical portfolio of telecommunications in the enterprise, particularly for organizations with many remote locations, it’s no wonder its challenging to keep on top of this inventory to ensure you’re not spending on products you’re not using. Consider that many of these products have feature sets that may have been useful or required at one point, but today have no purpose or are not exercised, and you have the source of a sizeable pool of unused value and consequently pay more than you need for telecommunications services.
Let’s consider some examples with POTS lines (aka 1FB), your standard analog business line. Even today, with digital services and IP trunking, there is still a need for the standard business line. Most organizations have hundreds or thousands of these lines serving everything from the voice inbound/outbound calling on your PBX or key system for the small remote office, to security and fire alert systems, to legacy modems for remote access for hardware and software maintenance. Over time, as the office grows or contracts, as new voice services are introduced or retired, these business lines tend to stick around on your monthly local exchange carrier invoice whether they are being used or not. If you consider a modest, average cost of $50 per line, multiplied times 3 or 4 extra lines not being used per site and applied across 50 locations, this is some real money being wasted; on the order of $90,000 per year. And this is a conservative example.
It is difficult to stay on top of this even with a dedicated telecommunications support staff considering the other demands on that staff and the likely turnover in this area. And let’s admit it; it is a very tedious activity to ensure you’re using what you’re paying for. The telecommunications providers are not much help in this area, as they will gladly continue to charge you for services that are not in use. The onus is on you, the consumer.
I’ve seen examples where MPLS or internet circuits continue to bill with a legacy telecommunications provider, while new circuits are installed with a new provider, wasting thousands of dollars per month. Or it might simply involve requesting a disconnect with your current provider of a circuit that continues to bill months later because they did not process the disconnect properly in the billing systems and the billed party did not follow through on subsequent invoicing to ensure the fees were removed. Most carriers only allow you to dispute an invoice going back 6 to 12 months, so even if you eventually discover the problem, you’ll have a challenge recouping all the lost value if it’s been long enough.
There’s a theme emerging that optimizing your telecommunications environment and avoiding throwing good money away requires good telecommunications management and relentless diligence, with your internal staff or, better yet, with a company that does this for a living such as a Telecommunications Optimization and Expense Management organization.
Here are some steps you can take to uncover unused services and keep on top of your telecommunications inventory:
- Conduct a periodic audit of all services for all locations. This requires some expertise, so ideally this is best sourced with a professional Telecommunications Expense Management Services (TEMS) organization. This is often done on a contingency basis, with fees for this service based on how much money they save you. They are going to be motivated to turn over every stone.
- With an audit in hand, use the new inventory to evaluate your billing each month to ensure you are being billed correctly. Avoid dismissing a telecommunications invoice review because it’s too complex or tedious. If you can’t handle this with in-house staff, source the activity to a TEMS provider.
- Create processes that ensure telecommunications is considered in all technology changes that may have an impact on your type, breadth or volume of telecommunications to ensure you don’t leave dangling services that are no longer needed.
- Challenge your telecommunications providers to ensure you are actively using all services. Depending on the service type, they can detect activity and tell you if it is being used or not.
- Get professional help. As noted above, a TEMS provider can audit your services and keep it optimized to ensure you are only paying for what you need. The costs for this service are typically modest and it gives you piece of mind that you’re getting the most value out of your telecommunications technology and providers.
Telecommunications services are clearly one of the more complicated purchases you can make and among the most costly for today’s businesses. Fortunately, you have resources available to you to make this process easier by relying on the experts that know how to extract value from telecommunications and put it back in your pocket.
NET(net) is often involved in helping our clients navigate the complexities of telecommunications, and helping them to achieve the high value and optimized costs in their telecommunications related technology and acquisitions. Please contact your NET(net) representative today to see how we can help you.
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