Telecom costs are complicated. When it comes to enterprise-level bills, it’s hard to get a clear picture of what you're paying for and where to find opportunities to reduce your costs.
Businesses are more connected than ever. So, it’s no surprise that businesses are struggling to handle the costs and are missing opportunities to optimize their telecom expense management.
Companies Struggle with Telecom Expense Management
Because businesses struggle to perceive the scope of their telecoms environment, they miss out on the opportunity to make new, greater savings. Issues affecting telecoms such as contract renewal and obsolete devices become expensive for companies unable to assign the manpower and the specialist knowledge to the problem, and instead get forgotten while costs pile up.
These issues only prove more difficult when expanded across borders, forcing organizations to deal with multiple bills and contracts from different providers. Bill quality varies dramatically between carriers, with some able to give you focused, detailed information on your telecom environment.
This means a comprehensive breakdown of your bills, and where the costs are coming from. Other companies using older methods of billing, such as paper, may only be able to provide a summary of information - not nearly enough to get a real insight into how to cut costs.
Telecom expense management (TEM) can help enterprises understand their bills and how best to manage them.
This blog examines what is included in a telecom bill, and why it might pose a problem for companies that aren’t utilizing the help of a telecom expense management vendor. Companies that try to deal with telecom issues on their own risk wasting valuable time and money, when a specialized solution could take much of the stress away from them.
What Does Your Company Pay For?
Companies rely heavily on telecommunication services. This includes telephones, mobile phones, wireless internet connectivity, and IT infrastructure. Each circuit needs to be paid for and will incur some form of charge. Staying on top of those charges is key.
When dealing with enterprise-wide contracts that encompass a large telecoms environment, it can be difficult to keep track of every change to your payments. Costs may have increased without you being aware, especially if your bill covers the running of hundreds of circuits - without sufficient information from the carrier, it can be impossible for a global corporation to see the full picture of how much they're paying for telecoms per individual.
If the amount of data being used by a division or individual has changed, your company needs to be aware of it, which is why it’s crucial a through line of communication is established regarding telecoms. Many businesses don’t understand how to get the best deal out of the telecom carriers they use, and so many of these issues go unresolved.
Companies habitually overpay for their communications services. Taking a closer look at the costs of telecoms and employing the skills of a telecom expense management provider can help significantly.
The Components of the Bill
Telecom bills can be broken down into different categories which reveal the extent of what a company pays for.
Monthly recurring charges (MRC) are telecom costs a company must pay each month to continue using a service. Organizations must pay for each of their connected circuits and will likely have a contract for each one. These monthly costs include line rental and service charges for each inventory item, which should be the same each month. On the other hand, usage charges will vary each month based on the amount of data needed and consumed. If the vendor is providing managed services, then that will also factor into the bill.
Non-recurring charges (NRC) are one-time payments made by the company. These one-off costs generally revolve around the purchase of a new device – this involves services like installation, and disconnection of previous circuits.
Other charges will also make up parts of the bill, including regulatory and pass-through fees. These will vary depending on the type of circuit and the location.
Finally, of course, there are taxes to pay on top of these charges as well. When the telecoms bill is broken down like this, it makes it much easier to decipher. Despite this, the information a company needs to pay and, crucially, understand its bills isn’t always available to them due to the nature of how some bills are delivered to customers.
Understanding Bill Delivery and Its Impact on Expense Management
Getting a grasp of your telecom costs is difficult without proper telecom expense management. Yet without enough data from the carrier, any TEM provider you work with will struggle to accurately assess your situation. Optimizing your costs will prove harder with lower quality billing.
Billing quality varies between carriers and the better quality your telecom bills, the more information from them you can get. Higher quality billing improves reliability and accuracy, allowing you to optimize costs.
In the US, most carriers support EDI Level 9. This means they provide you with the greatest amount of detail regarding your circuit inventory and the features you’re paying for. EDI Level 9 looks at the individual employees within your enterprise and their assigned circuits, meaning you know exactly what you’re paying for, per person. The savings are made in the small details and that level of granular detail is invaluable when trying to unravel your telecom bills and save money.
However, some carriers only provide paper information and as a result, only include a vague summary of billing information. A summary might include an overview of a sales team or regional division's costs, without breaking it down into individual circuits, or plans. Such a limited amount of detail makes it difficult to identify opportunities to reduce overall costs.
What are the Hidden Costs of Telecoms?
Even with additional detail, telecom costs are difficult to manage. Carriers will often go out of their way to make plans harder to comprehend – confusion leads to people simply putting up with the price they’ve got.
There are hidden costs that can cause unwitting businesses to overspend on their telecoms. For instance, if your organization operates across different locations, basic wireline spend may vary between them. There are often large variations in pricing between regions, including pricing that’s well above market value.
To ensure they’re paying a fair price for their wireline services, organizations should carefully inspect their spend and find means to negotiate rates. This leads into another hidden cost in the form of oversight on behalf of the company.
An inability to understand the market and win the best rates, plans, and discounts for your organization’s telecom needs will cost you extra money, every month. It’s money you don’t need to be spending. Having a local presence that understands the language as well as the local market provides the additional negotiation strength to win bigger incentives from carriers.
Carriers may try and impose unnecessary features on your plans, which might be free for a period, but then bill your company for the cost of that feature with an automatic renewal that you didn’t know about. Issues like this highlight the need for a regular, in-depth review of company contracts by a professional.
Offers given by carriers must be heavily scrutinised by a business before a deal is made so the business knows exactly what it'll be paying for when the time comes, and to prevent any unwanted surprises. A telecom expense management provider can work with a business to take on this responsibility themselves - as they already know and understand the different plans and how carriers work, they're in a much better position to tackle them.
How TEM Can Help
In-house solutions are rarely viable for larger corporations. Hiring a TEM vendor takes the pressure off your business to deal with telecom services on your behalf.
Telecom expense management covers many areas, from reviewing invoices and dealing with vendors, to auditing invoices and negotiating contracts. If your organization is spending several million across all its telecom estate, then working with a TEM vendor has huge benefits. When delivered competently, TEM optimizes your company’s telecom environment. Management generates continuous savings and prevents errors and overcharges.
Telecom expense management provides ongoing value for a company. It ensures invoices are paid correctly and optimizes the inventory, providing the ability to locate and analyze a circuit in any location. This a huge contrast to the blanket summary of data provided by some carriers. TEM enhances telecom asset visibility, making it easier to see where the most spend is coming from within your business.
Experienced telecom expense management providers handle the carriers for you, possessing the skill and insight needed to negotiate on your behalf. The best TEM vendors can assist your business on a local, as well as a regional, scale and have the resources to work with carriers no matter the size or location. Doing so, they can get the best deals on fixed-line contracts to ensure your enterprise gets exactly what it pays for.
A telecom audit is required to identify and fix billing errors, particularly concerning discounts and benefits carriers have agreed upon beforehand. Telecom audits should be conducted regularly, monitoring costs in real-time to ensure no month suffers from hidden or unforeseen costs.
Effectively implemented telecom expense management helps organizations monitor and control their telecom environment, giving them access to detailed information right down to an individual circuit. But it also helps alleviate the stress of dealing with carriers and confusing, opaque telecom sales and plans. Negotiating for the business ensures they save money each month on their bills.
Cass’ Telecom Expense Management Expertise in Action
We helped a global client optimize their telecom expense management with a solution that saw an enormous return on investment within the following year.
For years, our client had been working with a self-proclaimed TEM "leader". However, after turning to Cass for help, we orchestrated a TEM structure for them that reaped worldwide rewards. The client saw over $2 million in cost reductions and a 98% inventory accuracy in under 9 months.
After years of poor outcomes, we made sure to move fast and the client saw results within 100 days of working with Cass.
Read our case study to learn more about how working with an experienced telecom expense management vendor can help you to get a better grasp of your telecom bill and transform your cost-savings.
Topics: TEM
