A telecom management system is first and foremost a money saver. If the telecom system cannot provide a clear reason for you to invest your time and money (but, you may not need to pay for the system, more on that later), then why would you pursue it as a strategy? The return on investment, both hard dollar costs and time and energy invested, needs to be clear before the investment is made. Discover More
So, where do telecom management systems generate their payback? Telecom systems certainly create efficiencies in terms of automating manual processes within the IT and finance organizations, but our focus is on the hard dollar savings telecom management systems are renown for delivering. These hard dollar savings are in the “indisputable” elements of the telecom program. The hard dollar savings create a solid business case that managers can take to their executives for concurrence to move forward. If the investment element of the telecom system is low or free, then the only expenses that need to be covered before generating a clear return to the company is the set-up effort.
Where do these returns come from? Hard dollar savings can only be generated buy lowering the telecom bills of the user. This lowering can occur one of 3 ways: 1) by reducing the rates that the existing carrier is bill, 2) by changing the services the user is paying for so service is maintain or even enhanced while costs go down, and 3) by introducing new carriers with superior value propositions. A comprehensive telecom management operation will accomplish these three things and more.
Reducing rates charged by an existing carrier can be challenging. After all, you are typically bound by a contract or tariff, reducing the flexibility that the carrier has in changing what is being charged. Getting rates changed is possible, but it requires work on your part and may also force a contract extension. If you are happy with your carrier, a contract extension may be tolerable. The telecom expense reductions seen in this scenario typically range less than 10%, Telecom carriers in a re-negotiation proceeding do not have a significant incentive to reduce rates, so some sort of loyalty discount is typically rolled out. The two remaining methods of reducing your telecom expenses, however, are preferred.
Changing carrier’s services is a very effective means of lowering current spending without interrupting or interfering with an existing telecommunications carrier contract. Evaluating the specific services at each of your locations, determining whether you can simply disconnect a service, consolidating service to more efficient facilities, or up-grading to a newer technology can yield savings of 10% to 20% if the network has not been optimized for quite some time.
The best savings are usually obtained by actually using new telecom service providers to replace existing services with much more competitively priced services. There are many quality service providers that supply similar quality to the larger carriers at rates in excess of 30% below what the larger telecom carriers charge. Strategies are available for every comfort level, so using an alternative carrier to lower your cost can be extremely beneficial.
Consider using a telecom management platform to tie these three strategies together. Platforms that detail telecom inventory, analyze billing trends, as well as provide flexible analytics are best suited to support cost containment and reduction initiatives.