How Telecom Inefficiencies Can Damage a Company's Bottom Line
The dreaded phone bill. Some people see it as a waste of paper. Some see it as a huge headache. And some understand it to be nothing more than a payment amount and a list of calls made. But, at a large company with a lot of employees, this bill is much more complicated, even if it's only accounting for landlines.
What if your company gives every employee a mobile phone and sets up a virtual private network in some employees' homes? Each of these services adds an additional layer of complication, making it more difficult to discover billing errors and audit your inventory.
A telecom bill contains an overwhelming amount of information, making it nearly impossible for managers to review and verify every expense item for each of their employees. Not to mention dealing with a multitude of carrier disks or the manual entry of paper invoices. Even with armies of staff spending endless hours checking and reconciling telecom bills, allocating charges and monitoring for new and cancelled services, mistakes and errors continue to occur. Many companies have no surefire solution to completely verify they're actually getting the best bang for their buck.
In addition, billing errors and inaccurate inventory audits are small problems compared to those caused by ineffective provisioning policies and overpriced carrier contracts.
How It Can Go Wrong
Have you ever lost track of your home phone bill and ended up paying twice as much? You can easily catch this error and balance your finances, but, for larger organizations handling a number of duplicate charges, catching errors in a timely manner is not nearly as easy. It gets even more complicated when an employee leaves the company.
So, what happens when an employee quits or is laid off? Does HR contact your team so that their mobile phone, landline and VPN services can immediately be canceled? Let's be honest here. If your team is contacted at all, it is likely that the employee has been gone for some time.
While TEM suppliers produce different estimates, they approximate that between five and 15 percent of the telecom expenses incurred are the result of billing errors, such as duplicate charges and charges for services that have been canceled. While these billing errors can add up quickly, they represent a short-term problem compared with the total telecom expenses a company can face as a result of inefficient management.
Some companies recognize the impact of these short-term expenses and have a team of workers to reconcile billing errors and other discrepancies. Other companies attempt to reduce the size of their bill by hopping from carrier to carrier or bundling services. In reality, these strategies are no more than a quick fix. While these Band-Aids can reduce telecom bills, this short-term approach glosses over the underlying problems that exposed your company to escalating costs in the first place. In the end, they create additional problems.
Suppose that you have been asked to meet with the board of directors about the current state of the company's telecom operations. The scramble begins. To prepare for the meeting, you have your staff focus all its attention on an inventory audit as well as searching for and reconciling incorrect billing expenses. Your group is extremely busy sifting through thousands of pages of telecom records and data. As a result, your sourcing manager forgets that a major carrier contract needs to be renewed and it expires. A significant portion of your company's sales force loses mobile access. While the sourcing manager scrambles to secure a new contract, your sales force must operate in the dark, wasting countless hours of time and missing revenue-generating opportunities. It sounds like a nightmare but unfortunately, it does happen.
Telecom Usage Analysis
Let's look into how companies are breaking the cycle and taking control. Companies can reduce the cost of their telecom infrastructure in a resourceful, long-term way. They can conduct a strategic review of their entire telecom management process and focus on employee needs and carrier contracts.
Through careful research and analysis of which employees have access to and use a company's telecom tools, the telecom manager can design an effective provisioning policy to reduce expenses without jeopardizing essential services. Let's say that half of your company's employees currently have a company mobile phone and another quarter have a company BlackBerry. It is safe to say that some of these employees do not need a mobile phone or a BlackBerry to fulfill the requirements of their positions. After identifying these unnecessary expenses, you can easily trim some fat from the telecom budget. Since companies are constantly evolving and employee requirements often change, it is important to conduct periodic provisioning reviews.
This analysis of employee telecom usage is also essential when negotiating with carriers to source the best telecom contract. By understanding which telecom services are necessary and for which employees, you can negotiate a carrier contract that excludes needless or redundant services. In combination with industry benchmarking and a review of previous program costs, this information can help managers select a service provider that offers the right capabilities at the right price.
While provisioning and sourcing can help to solve fundamental problems that escalate telecom expenses, a telecom team often doesn't have the time to conduct this analysis. With a workforce of thousands, it is impossible for them to sift through data pertaining to each employee's mobile usage and determine who does and does not need these services.
By breaking this bulky bill down into individual expense items, it is easy to reduce a company's telecom expenses and streamline its telecom operational review. Unfortunately, without a system to read and analyze the data, breaking it down is not easy.
While small companies may prefer to employ a single staff member to manually breakdown the enterprise telecom bill, a company with a thousand employees can save time and manpower by employing a telecom expense management (TEM) system, which automatically breaks down the bill for easy analysis. In addition to identifying billing errors, TEM systems make it easy to determine exactly where your company's telecom expenses are coming from, how frequently services are being used and by which departments.
With an itemized listing of expenses, a TEM system provides the necessary data to create a new telecom strategy, which can generate long-term savings. By understanding the specific expenses a company is incurring and where they are originating, telecom managers can pinpoint unnecessary expenses and adjust their provisioning policies.
Whether a company implements a TEM system or hires employees to manage the enterprise telecom bill, breaking down the bill will give it the tools necessary to reduce the cost of telecom services without jeopardizing their functionality.
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