Bad Habits and Good Practice - Top Tips to Reduce Telecoms Expense

As businesses tackle the world of converged communications, where mobile phones compete for attention with fixed lines, where Voice over IP (VoIP) services promise a cost-free nirvana, and where every supplier talks about reducing costs, why is it that telecoms costs seem to keep rising?

The truth is that UK businesses are throwing money away by not paying attention to how they procure, consume and manage telecoms services. Some 75 per cent of UK firms do not have a telecoms policy in place and in ten years of investigation we have very rarely found less than 10 per cent in savings on an annual basis – indeed a recent customer audit uncovered a 38 per cent ongoing saving on their monthly costs.

With the UK enterprise telecoms market estimated by Yankee Group at some £5bn in 2006, we calculate that somewhere in the region of £1bn is being wasted every year – with your customers. Money that could go straight to the bottom line.

In fact, you could say that every second that every employee is on the phone represents a profit loss. That’s why the advent of Telecom Expense Management has proved so popular in the US – this is an industry where the TEM provider can self fund their services because they stop organisations haemorrhaging money.

And when you know where to look, what to do and have the right software tools, you can help your customers to stop the bleeding quickly.

Procurement

What’s more the savings can start before your customers even buy equipment and services. The right approach to procurement can deliver savings from day one – buying from a position of knowledge and with benchmarked information – you will be able to give expert guidance through the process and cut costs from the outset.

Policy

By putting a policy in place for future purchasing decisions and for the use of the systems in use today can also lead to immediate savings. Educating users on how to get the best from their telecoms investments and providing guidelines on responsible usage will all help to drive down costs. How many of your customers users for example still use their mobile phone to make a call when they are standing next to their office phone?

The next step is to police the usage. If people are constantly using mobiles where they should be using VoIP, tell them. Let them know that you are on top of the system and that they are costing the company profit.

Processing

You can help here by processing and checking their monthly invoices rather than simply billing your customers. Check that the right tariffs are being applied and that bulk discounts or tariff bundles are the most cost-effective for their pattern of usage. Simply checking a bill often identifies five per cent in savings. Also, have contract logs so that you constantly review and optimise the services that they are buying. By adding this service to your portfolio you will quickly become a trusted supplier, building upon your long term relationship.

Publishing

Highlight to their staff the steps you are taking, the savings you are making, the wastage you have identified. Let your customer know that you are on the ball – that will also serve to cut the costs of misuse and fraud.

So at a base level Telecom Expense Management covers:

• Informed Procurement
• Established Policy
• Careful Policing
• Understanding Costs and Inventory
• Accurate Processes
• Internal Publication

There are other simple everyday actions that can produce one-off or ongoing savings. Audit the network to identify unused circuits. Many companies still have ISDN lines incurring rental charges but carrying no traffic as they have switched to broadband and other Internet-based transfers.

Another example is that a sweep on directory enquiry numbers on a system will usually identify a myriad of services being used in different parts of an organisation. Yet policy or applying simple changes to the call routing in the telephone system will help to force calls to the same cost effective supplier and can dramatically drive down costs.

Telecom Expense Management can be as simple and as sophisticated as what your customers need. But they do need it; and as the telecoms world gets ever more complex, the potential for waste and for savings is increasing all the time. There has never been a more important time to show your customers you can help them more than just providing billing for their calls.

AKJ’s Top 5 Tips for implementing an effective Telecom Expense Management policy

Check Invoices – regularly validate charges against contracted rates, especially with the ordering of new services
Manage Usage – create sensible guidelines for how employees should use their phones and proactively monitor all usage
Supplier and Contract Management – maintain an accurate log of all telecoms contracts and negotiate regular benchmarking and price review clauses to allow you to take advantage of market price changes
Inventory and Estate Management – create and manage an accurate inventory the telecoms estate to allow you to easily spot opportunities to rationalise unwanted services and standardise services and equipment
Telecoms Expense Management Reporting – generate and distribute accurate and informative management information to users and managers and constantly reinforce usage policies

To find out more about how you can offer an additional value added service please call AKJ on 01634 673 800 or email info@akjl.co.uk for more information.