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Five Key Practices for Reducing Telecom Expenses

Telecommunications expenses are among the largest cost items on the corporate income statement, easily overlooked by companies as simply the cost of doing business.  Despite declining costs, the reliance and proliferation of these services have created a precarious paradox that, if ignored can have severe consequences that negatively impact the bottom line.

Next-generation solutions are able to process and normalize tremendous amounts of electronic billing data to be viewed in a centralized platform.  This removes the burden and complexity associated with data acquisition, enabling telecom departments to focus their efforts on following best practices and allowing for consistent improvements in reducing telecom expenses.

Organizations that follow these five key practices can achieve lasting cost savings and improve the management processes associated with telecom:

  1. Uphold a consistent Order Process for the entire organization. Telecom activity begins with Moves, Adds, Changes and Disconnects (MACD) to services within the organization.  When ordering is ad hoc, manual or conducted in isolation for a central view of overall telecommunications services, the organization is at a disadvantage.  Upholding a consistent order process for the entire organization plays a critical role in maintaining an up-to-date inventory.
  2. Maintain a real-time inventory. The next critical best practice is the creation and maintenance of an accurate inventory of your organization’s telecom services.  Studies show that 7% to 12% of telecom invoices are in error, making it crucial to have a system that can match actual services being used against each invoice.  This is particularly essential in the detection of billing errors.
  3. Proactively analyze every invoice. Proactively analyzing every invoice allows for visibility into the key characteristics of telecom services, assets, contracts, vendors and usage.  The business intelligence gained from electronic data provides organizations with numerous strategic advantages, including improved negotiating power, budgeting, forecasting and business continuity.
  4. Validate invoices against contracts and inventory. Due to the large number of services and assets that need to be validated, much of this process must be automated to generate an exceptions report that details any items that do not match the invoice and inventory.
  5. Allocate costs to dedicated cost centers. The last key practice involves taking telecom cost control to the next level by constantly controlling and tracking the consumption of services through the allocation of costs to dedicated cost centers.  With telecom service usage increasing at exponential rates, monitoring usage is as important as monitoring invoices.  By monitoring this usage at a departmental level, organizations can optimize rate plans and enforce usage policies that can lead to lower costs.

Incorporating these five key best practices into the management of telecommunications represents a profound change from how telecom has traditionally been managed across the organization.  Collectively, these five key best practices provide a proven path for the consistent reduction of telecom costs through improved management.

Thanks to METHOD’s expertise and industry knowledge, we renegotiated our existing contract and saved over 30%..

- Sean Warner, IT Manager

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