Enterprises often are overwhelmed by the complex nature of managing their communications expenses. The advent of mobile phones hasn’t made the job any easier. That’s why often, the smartest move is to hand some or all the of the job over to a professional firm that specializes in telecom cost management.
What exactly is telecom cost management? TMCnet asked David Toomey-Wilson, president and director of global sales at MDSL (News - Alert), to explain what this discipline involves and how it is applied in the real world.
TMCNet: How would you define ‘telecom cost management’?
DTW: Telecom cost management is not a project — it should be seen as an on-going process that supports mission-critical business functions. It can best be viewed as a never-ending circle of activities. An organization starts by designing its telecom network based on its business needs. This drives a Request for Proposal (RFP) from telecom vendors that leads in turn to contract negotiation. There is a constant churn in requirements as new services are provisioned and old ones discontinued and a stream of invoices that must be checked for accuracy.
The contract terms must be managed to ensure service level agreements (SLAs) and committed spend levels are met and, as technology advances, new options in network design emerge and the circle begins again. Throughout this whole process, organizations want to ensure that they are spending their telecom dollars effectively and that there is no waste — or, in other words, that they are employing telecoms cost management.
TMCnet: What are some of the challenges enterprises face when managing their telecommunications expenses?
DTW: The first challenge many organizations face is getting a proper grip on total company-wide telecom spend. Without such knowledge, fully controlling telecom cost becomes impossible. A second area of difficulty is dealing with the carriers on everyday issues — in particular getting disputed charges resolved. A further challenge is to ensure adherence to company policies once these are set. This is especially difficult in the realm of wireless where a multitude of exceptions can occur.
TMCnet: How does MDSL help enterprises overcome these challenges?
DTW: MDSL has a great deal of experience working with companies’ finance and legal departments as well as with the telecom carriers themselves to build up a true picture of total telecom spend. When dealing with vendors, MDSL benefits from our specialist staff’s deep understanding of telecom products and policies as well as the detailed knowledge of vendor organizations that comes from interacting with them on a daily basis. To ensure adherence to company policies, MDSL offers a specially designed telecom e-procurement system that can be used to ensure only approved services are available in the catalogue for end users to order (e.g. standard wireless devices and plans) and that these orders are then passed for proper internal authorization before being sent to the carrier.
TMCnet: What role does cost management play in telecom cost management?
DTW: Telecom cost management is an integral part of the bigger task of supplier cost management within an organization. As such, all of the usual cost management and sourcing disciplines and techniques can be applied, albeit with a unique twist because of the nature of telecom services. MDSL’s Telecom Cost Management software takes account of the particularities of telecom services but enables them to be treated as part of a bigger undertaking by, for example, interfacing with already installed spend and contract management systems such as Ariba and Peoplesoft.
TMCnet: What roles do inventory and optimization play in telecom cost management?
DTW: Inventory lies at the heart of telecom cost management. Unless an organization has a clear, accurate picture of their telecom services and spend then all aspects of telecom cost management will be ineffective. With a clean inventory, organized in an appropriate database structure, optimization of services can be carried out and the resulting savings achieved.
TMCnet: What role does managed application services play in telecom cost management?
DTW: MDSL offers its telecom cost management software suite in an application services provider (ASP) environment. This removes the need for the client’s IT department to provide support for the application and eliminates any possible dependencies on the client’s hardware or network infrastructure. At the same time, management reports delivered through the web ensure that all executives within the organization have access to the information they need wherever they may be located.
TMCnet: What role does automation play in telecom cost management?
DTW: Automation ensures accuracy and reduces cost by avoiding the need for manual rekeying of data. MDSL provides automated links from its telecom cost management software to in-house human resource (HR), general ledger (GL), accounts payable (AP), procurement and call-logging systems. MDSL also automates the process of linking to telecom carrier systems wherever possible allowing both invoices and service modifications, changes, adds and drops (MCADs) to be processed electronically. MDSL has built such links not only with domestic US telecom suppliers, but with telecom carriers around the world.
TMCnet: How big a problem are telecom billing errors for enterprises?
DTW: Billing errors by telecom vendors are very significant. According to research carried out by the Aberdeen (News - Alert) Group, 7-12 percent of telecom services charges are in error. For large organizations, this can add up to more than $8 million annually in lost profits.
TMCnet: What else should people know about MDSL and telecom cost management?
DTW: Multi-national organizations should see telecom cost management as a global activity. Although it may have been pioneered in the US, the benefits of applying telecom cost management apply equally well elsewhere in the world. MDSL as a European-headquartered company, with offices in the US and Asia and round-the-clock phone support, is uniquely placed to help international organizations realize the full cost savings available from their world-wide telecom spend.
To learn more about the concepts discussed in this article, please visit the Telecom Cost Management channel on TMCnet.com, brought to you by MDSL.
Mae Kowalke is senior editor for TMCnet, covering VoIP, CRM, call center and wireless technologies. To read more of Mae's articles, please visit her columnist page. She also blogs for TMCnet here.
Edited by Mae Kowalke