Tapping Your Telecom Spend for Cost-SavingsTapping Your Telecom Spend for Cost-Savings
With revenues down and the end of the COVID-19 pandemic unknown, companies are looking at all possible ways to reduce costs.
October 14, 2020
With no end in sight for the COVID-19 pandemic, many companies are starting to look at all possible ways to reduce costs in 2021. As has long been the case, telecom — voice and data networks, copper lines, teleconferencing services, and so forth — is one of the go-to financial wells they’ll look to tap for savings.
Some IT managers will argue that the telecom well is dry, that they’ve already squeezed all extraneous costs and negotiated every rate down to the lowest possible.
Yet, when we go into companies — large and small — we continue to find savings.
Here are some examples of overspending I’ve seen at various companies lately:
Paying for legacy services that new technology has replaced
Continued spending of $7,000/month on teleconferencing services rather than using newer technology that would cost just $1,500/month
Paying 200% more for toll-free numbers by using TDM-based “800” services instead of migrating to IP 800 services
Paying for services no longer in use
Paying $3,400/month for a TDM data circuit no longer in use — and that hadn’t been in use for over five years (Note: Carriers try to cover themselves by contract clauses that only allow you to go back six months to dispute billing errors. And, technically this isn’t a billing error)
Paying $4,500/month for POTS lines not in use
Just paying too much
Paying five times more for flat-rate business lines than necessary based on current rates
Paying 50 cents per minute for long-distance calls
Failing to renegotiate long-distance and 800 rates, instead paying rates per terms of lapsed contract
Paying four times too much for managed router services
Billing Errors
Paying for 175 VoIP channels when only 125 channels are active
The list goes on — and, as noted above, it doesn’t matter if the company is large or small. Telecom expertise, experience, and focus can be hard to find in either case. At large companies, for example, we frequently see system admins responsible for managing telecom invoices. While these admins are technical in nature, they don’t have the experience on the billing side to identify potential errors or savings opportunities. Or, we see telecom management left to an IT manager tasked with greater priorities, like security, end-user needs, and customer service tools. If the invoice is in the ballpark of previous spending, it gets approved.
We see these mistakes:
Signing five-year contracts — while prices go down and service deteriorates, they are stuck in a long-term deal
Paying increased rates by failing to renew contracts but continuing to use the services
Keeping a legacy vendor at a high cost for a variety of reasons — long-term relationship, perceived difficulty of changing vendors, or limited knowledge of the marketplace
Assigning telecom invoice management, which can be quite complex, to inexperienced personnel
So, I am here to tell you, telecom is still a source of savings potential for many companies. You just have to find the person with right skillset and time to do it.
"SCTC Perspective" is written by members of the Society of Communications Technology Consultants, an international organization of independent information and communications technology professionals serving clients in all business sectors and government worldwide.
