Press Releases

Telecom Expense Management - More than a Telecom Audit

Back to

Jan 7, 2007

 

Telecom Expense Management: Complexities + Confusion = Cost

Telecom expense management has gotten complex in recent years. A telecom budget once limited largely to local and long distance services has exploded to include data networks, cellular phones, wireless network infrastructure, conferencing services, PDAs and interactive pagers, VoIP services, and more – all wrapped in an intricate web of price plans and contracts. Further, the bundling of products within a single contract creates complex pricing structures and differences in service level agreements that obscure an apples-to-apples comparison of vendors and may require a more complicated telecom audit. In a medium-to-large enterprise, this proliferation of services and vendors can bring telecom expense management to the forefront with the erosion of EBITDA margins through abandoned inventory, unnecessary services, and excess service charges.

Companies lack the tools that provide visibility into their telecom spend, and companies do not supervise telecom expense management proactively to achieve efficiencies. Industry analysts have unearthed evidence that points to these managerial shortcomings on both the macro and micro levels:

Corporations are missing big cost savings by failing to consolidate their telecom contracts. With wireless services, for example, typical savings range from $20 to $30 per month per employee; with 1,000 mobile workers, consolidating carrier contracts can translate into in savings of $250,000 to $350,000 per year –

Gartner Group
North American MSBs Seek Cost-Saving Opportunities
James A. Browing and David Neal, August 10, 2004

So, how should you begin to address telecom expense management appropriately?

Commission a Telecom Audit

Conventional wisdom suggests you should commission a telecom audit. A telecom audit can add value, but only for the short term. Why? A telecom audit is a restricted reporting event that cannot evaluate future telecom investments to support personnel changes, new worksites or future networking needs. From the moment your auditors leave for their next job, your grasp of telecom expense management diminishes with each new contract, vendor, or monthly billing cycle.

Even as error rates on telecom bills run 10 to 15 percent and “telecom creep” threatens to blow corporate telecom budgets, too many companies avoid a complex telecom audit, and instead rely on spot checks of a few bills to shave costs and stay under budget. Toss in an acquisition of another company and its telecom devices, infrastructure, and contracts, and it’s déjà vu all over again as you call in the auditors for another short-term fix that fails to deliver long-term cost prevention.

Is this any way to manage one of your largest and most fluid expense items?

Leveraging Technology for Telecom Expense Management

By utilizing sophisticated technology and proven methodologies, telecom expense management firms empower corporations to eliminate unnecessary telecom costs and, more importantly, use a telecom audit to develop a process to manage this complex cost center smartly for the long haul.

Call it cost containment, cost optimization, margin expansion or any other management buzzword. Considering the impact that telecom expense management can deliver to your bottom line, your shareholders will call it smart.

Solutions provided by telecom expense management firms allow corporations to gain efficiencies, freeing your employees to redirect their time and energy to mission-critical tasks that will grow your business. Specifically, telecom expense management technology enables your team to deliver complete lifecycle management of your telecommunications assets on an ongoing basis, providing such benefits as:

Short-term cost recovery: The right technology can extend a primary benefit of an audit by providing a comprehensive analysis of all telecom bills and reconciling any charges with the specific terms outlined in your vendors’ contracts. Consider it an antidote to erroneous or even fraudulent billing practices, such as “cramming.”

Long-term cost prevention: By implementing technology that applies a best practices level of analysis through the entire telecom lifecycle, your budget process will gain greater clarity and more reliable projections of future costs – addressing telecom spending problems and opportunities for savings long before invoice and contract issues are discovered.

Improved operational efficiencies: Today, most telecom and IT staffers are overwhelmed with tedious and repetitive tasks that prevent them from thinking and acting strategically.

All too often, these staffers are preoccupied with inventory, procurement, order processing and contract management. With the right technology, companies can trade much of the time now spent on administrative chores to focus on operational and strategic issues such as ensuring the quality and availability of your voice and data networks.

Accurate cost allocation: Your cost accountants will find it easier to allocate telecom costs across your company’s business units, driving accountability for this expense item to the end users.

Simplified, accurate reporting: With new reporting demands related to Sarbanes-Oxley compliance, your company must have a reliably accurate, long-term financial view of all major expense categories. Historically, mid-sized companies have relied on spreadsheets to maintain that critical information. Instead of relying on such inherently limited tools, total telecom expense management technology provides a sophisticated solution to meet your increasingly important reporting needs.

A Holistic Approach to Telecom Expense Management is Critical to Success

A solution that integrates telecom billing as well as inventory and order processing enables your organization to centralize telecom expenses, scrutinize all bills for accuracy and consistency, or track down unassigned cell phones or other stranded assets. The expense management solution will serve as the hub of a process that analyzes your telecom costs not just once every 12 or 24 months, but every time you add a wireless subscriber, equip a new storefront or deploy your wireless LAN. Quite simply, a holistic approach allows your company to:

• Gain greater visibility into your overall telecom spend
• Increase internal efficiencies from a staff perspective
• Focus on macro, strategic issues regarding telecom planning, rather than spending valuable resources on managing the minutia
• Leverage the best practices expertise of your telecom expense management provider
• Improve your bottom line by preventing wasteful spending for short-term savings and long-term cost prevention

Why BroadSource?

At BroadSource, we use the Application Service Provider model because we believe that approach is best suited to ensure scalability and reduce implementation time and hassle for our customers. We have aggregated telecom data across verticals, geographic regions, products and technologies to counsel our customers on how to make the best purchasing decisions. We bolster our platform with a comprehensive portfolio of services that gives you a workflow management tool focused on driving current and future excess costs out of your business.

The telecom audit represents the starting point in the BroadSource process of evaluating a customer’s telecom assets. We perform an inventory of the customer’s physical assets, contracts, and customer service reports from actual bills. The BroadSource software platform is populated with our findings to establish a baseline for evaluating future invoices and work orders.

From that point forward, we will manage the intake and processing of your telecom bills and give you a consolidated view of your telecom spend each month. This reporting evaluates your telecom expenditures by cost center, user and location. The integrated nature of our platform supports your forecasting, budgeting and planning needs.

We monitor your carriers’ performance against your service level agreements to give you the information needed to hold carriers accountable and guarantee that you receive every penny worth of the service you purchased. And, we will deliver an accounts payable file with cost allocations to automate this process all the way to the clerk who pays the invoice.

More specifically, we believe a defining difference with our platform is the integration of inventory management into a cost control process. Why is this important? Consider, for example, the addition of a new wireless subscriber. Traditionally, a company records the receipt of the wireless invoice, pays the bill and files it away. However, the invoice offers no context beyond the costs that it enumerates, including why the account was opened. BroadSource applications include a dynamic inventory management tool that can manage and update inventory records and dissect a bill into its component cost items to help you better understand where your telecom spend is going.

Think about how many such transactions your company conducts in each year, and the potential cost savings become evident. Remember: This tool drives an expense management process involving recurring monthly bills and thousands of transactions each year. That process delivers a compelling return on investment as BroadSource customers often realize payback in less than 12 months. Consider it an ounce of cure for a pound of cost prevention.

Conclusion

Telecom products and services represent a mission-critical support function that will continue to grow more complex in terms of their technology, functionality and pricing. Do you know what you have? Do you know what it costs, and whether you’re getting your money’s worth? How will you differentiate what you need and what you can live without? In an age when a quarterly earnings statement “miss” can shear half your market cap, you must aggressively manage your costs of doing business.

Telecom expense management technology delivers the information you need to manage your telecom spend and avoid unnecessary expenditures with integrated analysis of your inventory, equipment, contracts, vendors and billing.

For more information on how BroadSource can ease your telecom expense management migraine, contact 1-866-BROADSOURCE or visit www.broadsource.com

 

TAG's article library is optimized by Medium Blue, ranked the #1 search engine optimization company in the world.

Back to