BUSINESS TALK
Telecom Expense Management A good call when it comes to cost savings
Paying more for your telecoms than you should be? Ben Mendoza, CEO, of MDSL, suggests that Telecom Expense Management (TEM) could be the solution for across-the-board savings.
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here is no denying that telecoms services are an essential utility for any modern business. Yet telecom services, as a utility, are truly unique. I challenge you to think of any other essential utility service (not hardware) such as water, electricity, gas etc., where the costs actually get cheaper year on year?
I havenʼt discovered one yet, and until I hear of something else, I feel it is safe to say telecoms is truly unique in this respect.
Now ask yourself – have your organisationʼs telecoms costs reduced significantly year on year in line with this ongoing reduction in telecoms costs? The answer is: probably not, and the reason is that although it gets cheaper call by call, text by text, we use more and more of it each year. In fact the rate at which usage is rising outstrips the effect of falling prices by a significant amount. Letʼs give that some scope. A study by ABI research (
www.abiresearch.com) predicts there will be more than 7 trillion
In today’s telecoms negotiations, you need accurate business data...
SMS messages sent in 2011. My daughters alone will almost certainly account for a good proportion of them. So letʼs look at some of the common reasons why companies pay too much, and letʼs follow the process from procurement to payment (P2P). It is generally accepted that the legal responsibility of the financial and procurement officers in all large firms is to try their best to achieve the optimum balance of cost, reliability and the quality of services they procure for their businesses. Yet many fail miserably when it comes to telecoms. Why is this? It is true that telecoms needs a reasonable amount of market understanding, and it is true that telecoms is an extremely dynamic market where new technologies spring up almost every day; however, this is the case in most areas of life now and is no excuse for lax practices. There is a “best practice” approach to managing telecoms expenses and it doesnʼt involve a magic wand – yet many firms arenʼt using it.
Most procurement professionals love to negotiate deals where they can fix a good price over long period. Imagine how great it would have been to have been able to fix your petrol prices at 2008 levels for 5 years! But that is the worst possible strategy in telecoms contracts since, as I pointed out earlier, prices will keep going down. Take that approach and two years into your contract you will look very foolish, when all around you are paying far less for better services. In todayʼs telecoms negotiations you need accurate business data and, have no fear, in telecoms there really is no shortage of data. Most large companies will (often unknowingly) generate and/or receive millions of rows of telecoms data every month through bills and call logging systems.
into actionable insight. Then you are ready to sit at the negotiating table. Armed with the pertinent insights to our historical usage and likely future requirements we sit across the table from the supplierʼs sales representative. We are a good client account and the supplier knows they are in a competitive market.
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Deals can be done and we are both keen to do them. So we start to negotiate the charging plans. We might be looking at “pooled” minutes or data “bundles”, or the price of a roaming call from Poland to Germany on a weekday evening: there are actually thousands of data points that can be negotiated. Many cups of coffee later we have hammered out discounted prices on all the critical data points and we have agreed to take the Okey-Kokey data bundle. The salesman collects his papers and heads for his office dreaming of commissions. The phones still work the way they always have, but we wait eagerly for the new service pricing to take effect on our next bill.
Unknown to us, the salesman has returned to base and handed over our new agreement, and the vendorʼs billing and accounting department has responded: “There is no way on this earth that our billing system can cope with these special prices, and weʼve just decided that the Okey-Kokey data bundle plan is being superseded by the Incy- Wincy data bundle plan in March… What shall we do…?”
| 26 | August 2011
What tends to happen next is nothing
www.printwearandpromotion.co.uk
he trick is to turn that data into information, that information into knowledge and that knowledge
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