5 Proven Steps: From Hard to Control to Total Control of Your Telecom Environment

In these difficult economic times cost cutting and improved efficiencies is mandatory to act as a hedge against the current difficult business environment. Telecommunications is often a top three budget item for most companies and as such is ripe for spend reduction and time savings so critical to your enterprises bottom line.

The Challenge

Few if any companies have the time or the tools to effectively and efficiently take on an enterprises telecom management. The lack of automation and visibility to invoice details, the inability to track telecom spend categories, limited reporting data and in-house expertise leads to out of control spend and the inefficient use of the telecom management teams time.

The Road Map From Hard to Control to Total Telecom Control

Anyone embarking on a road trip (to places not previously traveled) usually charts their coarse using a roadmap. Often they wisely select various steps that mark the progress of their journey. To successfully conclude their trip they typically establish not only the steps to be taken, the safe arrival at the correct destination, but also benchmark how cost-effective their decisions are.

The same type of thinking should guide those responsible parties who are tasked with the management/optimization of a company’s telecom assets.

5 Proven Steps to Gain Telecom Control

Step 1: Assess the Situation

To know where you are going, you need to know where you have been. First ask the right questions so you can access your telecom situation.

Are you really in control of your telecom spend? Is all your telecom information located centrally and are the various spend, service types & usage categories reportable? Are the telecom assets correctly attached to the appropriate cost centers and how easily is this information accessed and monitored?

What are the total telecom costs for your company by business unit, carrier, types of service, and who is responsible for both knowing these line items and optimizing these categories? How often are usage, feature, and service type optimizations taking place?

Are your company’s contract terms up to date? Are your business rules honored and verified regularly? Are your invoices correct and how often are they validated?

What exactly are you being invoiced for? Are you paying for any terminated services, zero use devices, and are you paying for any unneeded feature options &/or regularly paying for overage penalty’s for services not on the right feature/option plan? What process do you currently have in place to verify that you are not? How regular is granular optimization taking place?

On what information do you forecast future telecom expenses and how accurate have these forecasts been? Do you have in-house expertise utilizing the right tool sets to insure the efficient optimization of all telecom assets?

These are just a few of the questions that should be asked to assess the health of your current telecom condition.

Step 2: Analyzing the problems

If you can answer the previous questions comfortably with a high degree of confidence, you are likely receiving positive results from your efforts and are in varying degrees of control over your telecom spend and assets.

However, if you could not adequately answer some questions or your analysis provides painful insights into costly telecom management oversights… It’s time to seek help!

Step 3: Understand your options

Once you have determined your telecom team requires outside assistance to dramatically reduce telecom costs and improve your telecom management team’s efficiencies. Determine which will work best for your company; either a standard Telecom Consultant/Auditor or select a Telecom Expense Management solution provider. Perhaps you need the assistance of both!

A telecom consultant/auditor will often provide insight and a “snapshot” into your current telecom environment often checking for optimal contract terms, correct service type capacities, utilizing the appropriate technologies and overall providing assistance in getting your current telecom situation healthy and whole.

The Aberdeen Group states: “Telecom Expense Management (TEM) is a term that typically describes a method for tracking, cross-charging, and paying invoices in a timely manner. However, Aberdeen research prefers the holistic approach of a “total telecom cost management” solution that also stores contracts, handles orders, manages assets and service inventory, and provides standardized analytics on an enterprise-wide basis.”

Therefore a Telecom Expense Management (TEM) solution provider (if tasked to do so) will help your enterprise to better account for and efficiently manage your telecom environment on an ongoing basis. Your TEM provider can provide both configurable software and analytical expertise.

Understand and know what TEM IS and what TEM IS NOT!

TEM IS about achieving savings and control of telecommunications spending and assets by using automated tools such as software and business processes working together for an active management of telecom services in a procure to pay life-cycle. TEM IS NOT just software. Software without active use of industry approved best practices in the business processes will not result in optimal control of your telecom environment.

Step 4: Review and Consider Telecom Management Best Practices

The best possible TEM results occur when a company integrates the Best in Class software tools with industry recognized Best Practices. When an automated web-based solution is combined with the following practices your company will go from a telecom environment that is hard to (or out of) control to Total Control.

Invoice/Financial Management
eProcurement & Help Desk Management
Provisioning/Order Management
Inventory /Asset Management
Contract/Vendor/Dispute Management
Cost/Usage Optimization
Report Management
Contract/Vendor Management

Step 5: Implement your selected solution to get control of your telecom costs and usage

Whether you like it or not you’re on the road to either telecom control or your telecommunications is hard to/or out of control. The roadmap outlining 5 proven steps to get your company safely to an efficient and cost-effective telecom environment is yours. Begin taking the right steps today.

For additional questions feel free to give us a call.

Gary is the Business Development Manager for Integrity Communications. With a wealth of telecom marketing experience, Gary provides useful insights for those seeking help with various telecom cost reduction strategies as they work to improve their telecom teams efficiencies concerning their business’ telecom environment.

The Benefits of Buying Used Telecom Equipment

When telecom providers experienced rapid expansion in the late 90’s and early 2000’s, new telecom equipment was the only option for businesses in the telecommunications industry. As 4G technology has expanded and providers have contracted, the availability of used telecom equipment has grown creating a surplus of used communications equipment. This surplus is creating a market where “used” is the new “new.”

There are different benefits for buying new or used equipment, depending on your application and specifications. However, used equipment costs considerably less than new and is still highly customizable. For instance, used telecom shelters can accommodate the same generators, racking, fire suppression and other systems as new telecommunications shelters. Much the same, used towers can usually accommodate the latest communications equipment.

When you think about buying used telecommunications products, the big question you may have is how do you find a company that sells used equipment at a good price AND provides the customer service your company needs?

If you’re looking at used telecom products, there are essentially two options:

Manage used equipment in house
A provider could manage their equipment on their own. Once equipment is decommissioned, the telecom company could organize logistics and storage for the used telecom equipment until it is needed elsewhere.
Work with an equipment company
A telecom provider could work with an equipment company to decommission, transport, store and refurbish the used telecom equipment.

There are a few challenges for telecom providers that manage used telecom equipment in house:

Managing operational expenses

Since the recession of 2008 and the growth of 4G technology, telecommunications providers have experienced a renewed focus on reducing operating costs while delivering higher quality service.

Making the most of redundant resources

The expansion of 4G technologies and the consolidation of telecommunications providers have dramatically increased the number of redundant resources including towers, shelters and equipment.

Managing your assets

Asset management for telecoms is integral to the success of the organization. A telecom provider must have the resources to be able to track assets from introduction through expansion, maturity and decline.

So how can working with a telecom company help your business?

Reducing costs

Using recycled telecommunications equipment provided by an equipment company can help reduce your expenses. Used equipment costs much less than new equipment, so if a telecom provider is only dealing with network expansion, used telecom equipment will require a smaller investment.

Next, telecom product companies will purchase used equipment from telecom providers when the equipment is decommissioned. The transfer of ownership from the telecom provider to the equipment company results in a decrease in the telecom provider’s fixed assets.

Increased efficiency

A telecom company can provide efficiencies by reducing the occurrence of redundant resources. They can act as a buffer between the supply and demand for telecom equipment. By focusing on providing telecom equipment and services, a telecom equipment company provides the benefit of reducing the risk for telecom providers and provides the benefit of increased efficiency in supply.

If you’re in the market for used communications products, finding a telecommunications equipment company that sells surplus or used telecom products in a wide variety of sizes, styles and materials will give you the best long-term benefits for your business. Remember, “used” is the new “new.”

6 Questions to Ask Your Telecom Consultant

Every company at one time or another utilizes outside consultants to help reduce costs and/or help with managing specific projects. Telecommunications is an area where consultants can not only help your company reduce expenses, but also provide ongoing support as your company grows and your telecom needs change.

Deciding on which consulting firm to bring on board can be tricky. The choices are vast. Most firms are reputable, but the industry is chocked full of “fly by night” firms looking to make a quick buck by conducting inadequate telecom audits and/or hawking telecom services under the guise of being a “telecom consulting” firm. Before you decide on which company to go with, arm yourself with the following questions that will help sort the good from the bad.

#1 How Long Have You Been in Business?

This seems like an obvious and logical first question. Many companies fail to ask it, and if they do, fail to put a high degree of importance to it.

Deregulation of the industry in 1984 saw the beginning of massive changes industry-wide. It is safe to say that the changes within the telecommunications industry over the last 20 years have been greater than those of the previous 100 years. Hundreds of new telecom carriers were spawned during this time – each with their own systems and processes. Selecting a consulting firm that is established enough to have experienced these industry changes first hand will bring you a tremendous amount of knowledge and expertise in dealing with carriers.

Choose a consulting firm that has been in business for at least 10 years, preferably 20 years or more. An organization that has been in the telecom consulting game for that long will have an excellent track record of success for their clients.

#2 What Area of Telecom Consulting Is Your Expertise?

When interviewing prospective telecom consulting firms, be sure to ask them what areas they feel are their strong points. A prospective telecom consultant will assume that you have narrowed down your own specific telecom needs and/or problems that you want and need addressed.

Even though you may not be able to identify one specific problem, write down your general telecom concerns. For example: Are you looking to reduce costs through telecom audit? Does your department need to be more efficient with bill paying, moves, adds, or changes? Are you looking to upgrade or replace equipment? Are you looking for telecom training for your staff? Are you considering migrating to a VoIP environment?

These questions deal with different aspects of telecom. Once you have focused on your own specific telecom needs, it becomes much easier to match those concerns with the prospective consultant’s strong areas of expertise. The closer the match, the better.

#3 What Is the Size of Your Consulting Company?

The telecom “meltdown” and widespread layoffs of the mid-to late 1990s spawned many telecom executives to enter the telecom consulting field. Even customer service or carrier sales reps tried their hand at telecom consulting. These “one-man shops” may offer flexibility and individual attention, but be careful when choosing to trust your entire telecom department with them.

These consultants will often farm out work to larger firms, in essence acting as a middleman without your knowledge. On the other hand, big is not necessarily always better. Large firms often will only work with companies doing in excess of $100,000 or more per month in telecom spending. Before contracting with any telecom consultant, be sure that you understand exactly who will be doing the work and identify the contact person responsible for progress reports, updates and to get your questions answered during the course of the project.

#4 Can You Provide Specific Case Studies and Results of Your Current of Past Clients?

A successful and reputable consulting firm will have experience in a wide variety of industries. When asking for references, don’t just get a few names and numbers to call. Ask to see specific projects that have been completed for clients in your industry or one that is similar. If it is telecom auditing services you are seeking, request to see specific results of recent audits that have been completed.

Ideally, this information should include the specific recommendations that were made and the percentage of cost-reduction attained after the audit was complete. Look for a firm that has consistent success in a variety of industries.

#5 What Are Your Fees and How Are They Structured?

Today’s telecom consulting industry contains a variety of fee structures and fee arrangements. Ultimately the valuation of services and the procedures by which fees are structured are matters of personal preference and should be based on total agreement between the consultant and client. Generally, fees will fall into one of three categories – hourly or per diem, project or fee based, and contingency.

Time-based projects can be billed hourly or per diem and may include the consultants expenses. Fee based projects are for those that are clearly defined but may require the most work by both client and consultant. Contingency arrangements may be the most popular, especially for telecom auditing.

Contingency arrangements are based on results attained for the client-usually a percentage of cost-savings rendered for a 12-24 month period. Be wary of firms that require large upfront retainers or advance payments. A reputable consulting firm will suggest the fee arrangement that suits not only the project but also your needs and budget as well. Very low quotes may suggest “boiler plate” solutions that could cost your company more in the long run. No company can survive without being paid reasonable compensation for services renderered. As in most business situations, you “get what you pay for”.

#6 Are You Compensated by Vendors or Carriers?

If you are quoted a very inexpensive fee arrangement for telecom consulting services, you may be dealing with a company whose eventual recommendations will be for products and services for which they receive commissions.

Telecom consulting services should be unbiased and be based on recommendations that are in the best interest of the client. Very small firms (1-3 person operations) are notorious for leading you in the front door with very low cost auditing services, then going for the “backend” by recommending their own carriers and/or vendors. Always be sure they firm you deal with has no affiliations (financial ones) with telecommunications providers and vendors.

Rent a Temporary Telecom Manager!

Business Cost Control Strategies

I cannot tell you how many times I’ve started a new relationship with a client whose telecommunications invoices totaled several thousand dollars a month across a wide network of locations, and the company employed only one (unqualified) person to manage all their telecom billing and ordering. Unfortunately, the result is always the same: these companies had been unknowingly hemorrhaging money for years by overpaying outrageous sums and erroneous charges for their telecom services.

Bringing in a professional telecommunications consultant (AKA, a temporary telecom manager) with appropriate resources and experience makes sense. This can effectively fix ineffective cost management and show quick, dramatic results. In today’s economy, you could easily bring in an outside expert on a temporary basis, because many great former telecom managers are out of work and working as consultants. Why not take advantage of this win-win opportunity?

Why do so many company executives still insist on using an in-house employee to manage their telecom billing? I have come to realize that they just don’t understand why this doesn’t usually work to their best advantage. They are stuck in old ways of thinking – not like the competent businesspeople they usually are.

Not only is it unfair to dump telecom management duties on some unfortunate, ill-prepared employee, but these poor souls are also destined for ultimate failure and blame. Having a person inexperienced in the intricacies of managing complex telephone bills is not conducive to running a solid, more profitable business.

A great many employees who manage the telecommunications function in-house have been assigned the task because it’s been delegated from management, often because no one else wants to do it – not because they are qualified to take on the role. These employees often fail, and not because they don’t want to do a good job. It’s because they have not had the necessary cost-cutting education that consultants get by routinely working with hundreds of different telecom vendors, a wide variety of complicated billing technologies, constantly changing promotions and special offers, and executing proven cost-saving processes.

What’s more, in the recent past throughout corporate America, many valuable in-house telecom managers were phased out as VOIP and IT-intensive services and technologies took over, making some of their formerly valuable services expendable. Nevertheless, those same telecom managers are still available to lend their telecommunications audit expertise as valuable business consultants who can still help companies save money. They have the background and experience to help.

Another reason small companies lack competent employees to oversee telecom activities is that many medium-sized companies believe that they cannot afford to hire someone with experience. This is a huge mistake. Employees who manage telecommunications costs that total over $50,000 each month usually justify their salaries with the cost-saving techniques they bring to their job. Your investment pays off with their expert industry knowledge, negotiation skills, and ability to get your company the best price for telecommunications services. This type of employee – as well as cost consultants – should be able to justify their existence through the actual cost savings they produce.

For smaller companies, finding an in-house qualified person to manage telecommunications vendors and telephone spending is not realistic. For companies spending less than $50,000 each month, the expense of a full-time employee to manage the phone bills is not usually a good financial investment. Instead, these businesses should rent a telecommunications manager-consultant, even if it’s for a only a few months. This person can cut spending and get control of your telecommunications billing network. It makes great financial sense, and it works because great savings are always produced.

Smart business people bring highly qualified, objective and impartial outside professionals (AKA, a temporary telecom manager) on board to manage and audit their company’s telecom spending. Contingency-fee-based project management consultants are a great way to do this. Since there is no out-of-pocket cost, there is no risk. If the consultant doesn’t generate savings, there is no cost.

Proven management consultants can save many more times their actual fees by doing the specialized telecommunications work for companies. These consultants understand that when entering into a consulting relationship that the work is not permanent. They are expected to evaluate the current situation, clean things up, produce dramatic cost savings and depart.

The byproduct of a consultant’s participation is a more profitable bottom line to the clients and companies served. Some would argue that companies should just hire a telecom expense management company to take away the task. However, the main difference between a telecom auditor and a telecom expense management company is that telecom expense management companies are there for the long run, and you might find yourself somewhat stuck with them. With a temporary telecom manager, a short-term expert fixes problems and leaves you with a smooth-running operation.

For most executives, it makes more sense to rent a telecommunications manager to manage their expenses. All CEOs, CIOs and CFOs should consider outsourcing telecom billing expertise for just a few months and see what I’m talking about. You can measure the actual value to your company’s bottom line.

As a telecommunications management consultant myself, I have found that telecommunications departments that are in most disarray either have employees lacking telecom expertise or cannot afford a full-time telecom manager. These are my best kind of client. I am able to help them with substantial savings that accomplish a satisfying financial goal of improving the bottom line. I am able to find many economies for these clients.

The temporary telecom manager is able to create a positive impact on an organization by swooping in and saving many thousands of dollars in real bottom-line company savings. What’s more, as telecom consultants, we can bring control and simplicity to a chaotic situation: untangling the confusing corporate telecom billing process, investigating and securing refunds, and showing companies how to perform telecom service ordering competently and wisely.

How to Avoid the Top 4 Telecom Expense Management Difficulties

As a result of inefficient processes used to manage telecom expenses, over 70% of SMBs are forfeiting opportunities to reduce these expenses by an average of 25%!

The Challenge: Your company is struggling to manage telecom and Internet service costs across multiple locations with multiple carriers.

The Solution: TEM. Telecom Expense Management is one of the most effective methods a Small/Medium Business (SMB) can use to potentially cut thousands of dollars in wasted voice, data and Internet expenses incurred from over-billing, inefficient spending and outmoded processes. Effective TEM decreases telecom spend, increases available funds for IT investment, and improves bottom line efficiency. Unfortunately, many organizations haven’t taken this basic cost-cutting step that can significantly impact their business. This article outlines the most common TEM difficulties to avoid.

Defining Telecom Expense Management:

“Telecom Expense Management is the practice of managing the full cycle of telecom expenses from telecom invoices, usage, and cost allocation. By getting better control over your telecom expenses, you will reduce spending on telecom services and the operational costs associated with managing them.”

SMB Hard Dollar Cost Savings via TEM:

• Decrease overall telecom spend.
• Increase available funds for IT investment.
• Improve the bottom line.

SMB Soft Dollar Cost Savings via TEM:

• Improve process efficiencies.
• Increase staff efficiencies.
• Increase telecom infrastructure visibility.

Telecom Expense Management provides direct financial advantages. Spending for voice, data, and Internet has not only become more complicated to manage, it has also grown to represent 3% – 4% of revenues. With proper TEM implementation, SMBs will see immediate savings as well as generate ongoing operational benefits that continue to pay off over the long run.

The Top 4 TEM Difficulties:

Most SMBs waste thousands of dollars annually by not managing their telecom spend in a standardized, centralized and more accurate manner. With continually changing inventory, complex billing for a wide range of services, and confusing contracts, TEM is complicated and hard to manage. But, with telecom and related network services accounting for nearly 4% of company revenue in many cases, this is too big a number and too important a service for you to manage manually or worse, not manage at all. Avoid the following TEM pitfalls:

1. Inaccurate Telecom Inventory

Lack of an accurate inventory is the biggest obstacle to managing telecom expenses. Telecom inventory is a moving target with frequent Move/Add/Change/Disconnect (MACD) activity that must be reconciled with actual billing. Often, service disconnect billing is not actually removed from invoices, causing overspending. There may also be errors in timing on a bill for when a service has been disconnected, added, or changed. Or, incorrect pricing may be applied to new services. Know your inventory and automatically validate it. Telecom expense inventory needs to be stored in one place, so that you have true process efficiency, expense validation, and reporting consistency. An accurate inventory provides the starting point for validating charges such as closed locations or facilities that have reduced services due to downsizing. This may seem like a daunting exercise at the beginning, but with a strong TEM solution in place, you won’t have to do it manually.

2. Disconnected Telecom Data/Functional Groups

Different functional groups often do not understand how their telecom expense activities impact others. Procurement may negotiate contracts with the lowest priced provider, but billing or service may be poor. Groups that are responsible for validating charges may find they can achieve better results if they submit disputes before accounts payable pays the bill. There may be opportunities to partner with procurement to secure better results when the audit group negotiates large claims with carriers. Unify different functional groups involved with telecom including:

• Service Order Management/Move Add Change Disconnect
• Inventory Management and Change Control
• Invoice Management
• Expense Management (validation and optimization)
• Accounts Payable Bill Payment

By leveraging the organizations’ entire volume of telecom spending, better results will be secured. For example, many enterprises underestimate what they spend with telecom service providers. An SMB/Enterprise that is able to leverage the full volume of its spending with a carrier is more likely to get better outcomes when disputing billing errors and able to use this leverage to obtain better rates when negotiating contracts. When data for a TEM program is centralized, organizations find that employees use it more frequently and it is more accurate. An integrated database also will help to drive better alignment among different functions with consistent reporting. It provides “one version,” which sets a standard for getting groups to work together.

3. Labor Intensive Telecom Invoice Processing

SMBs and Enterprises may not be able to eliminate all of the bills that are received in paper format, but reducing the time spent on tactical labor intensive activities of processing paper invoices can be a big time saver. Streamlining manual paper bill processes with automated electronic billing also improves accuracy of the data that is entered into the system. It reduces the time to process invoices and payment approvals. This can eliminate late payment penalties and business disruptions that result from uncontrolled service disconnects. Most carriers offer electronic billing through EDI, CD ROM, or web downloads. An effective Telecom Expense Management solution provides invoice management that integrates electronic billing to simplify the process. Billing data is entered into a centralized repository that flags missing bills and streamlines labor intensive bill processing activities. Alternatively, organizations can outsource this function to a TEM provider and refocus internal staff on higher value activities.

4. Manual Telecom Invoice Validation

Billing errors occur because telecom services include some of the most complex charges of all invoices the enterprise receives. The charges include tangible assets (lines and circuits) with decentralized inventory spread over multiple locations and intangible services. Most organizations are manually validating thousands of line items for each telecom bill they receive. Or worse, no one validates expenses and errors are slipping by unnoticed. Error rates range from high volume, low dollar value invoices to more costly bills for data and inventory items. With cuts in personnel, technology changes, and changes in billing platforms, telecom carriers do not have the resources to validate billing. This has resulted in the need for organizations to proactively validate and resolve billing errors with their vendor. A good TEM Solution automates invoice validation to identify billing errors as they occur.

The Results: During transition, an effective TEM program categorizes your company’s telecom inventory and the intended usage for each line or service. Some customers identified over 50 obsolete lines, resulting in annual savings of approximately $20,000. Additionally, the TEM program found lines that did not belong to the client and achieved annual savings of nearly $4,000 by disconnecting these services. Overall, a properly implemented Telecom Expense Management Program averages a 20-30% savings for the customer.

Conclusion: Managing telecom expenses is complex and challenging. An effective TEM solution can help you avoid the most common expense management pitfalls by centralizing inventory, improving visibility, streamlining invoice processing, automating invoice validation, and controlling spending.