BUSINESS ARTICLE

Survive an Economic Slowdown with Telecom Expense Management

Peter Verhoeff

Checking the correctness of a telephone bill can be quite a challenge, even for one’s own personal telephone bill. Often the bill just gets paid without much inspection, yet many times telecom carriers make billing errors, which interestingly are mostly in their favor.
For a corporation, this picture becomes even more complex. A medium-size enterprise may have hundreds, or even thousands of pages to review. Moreover, there are added complexities with billings for many different services and equipment, often from a number of different carriers. And it sometimes seems that telecom providers go out of their way to make their invoices as confusing as possible.
The Aberdeen Group reports that telecom is one of the largest and most poorly organized expense categories in most companies. Eighty-five percent of telecom invoices are not audited, even though seven to twelve percent of all charges are incorrect, underscoring the pressing need for telecom expense management (TEM).
Enterprises spend an average of about 4% of their revenue on telecom, which means that telecom billing errors can add up to many thousands of dollars in large corporations. Another area of inadvertent waste is inventory. It is not uncommon for companies to continue to pay the cell phone bills for employees who have left years ago, or to be charged for services at branch locations that have been closed.
Telecom expense management is a technology that concentrates on reducing the costs of telecom. The three main areas it deals with are:

1. Telecom invoices

2. Telecom inventory

3. Rates and tariffs

A successful approach to telecom expense management involves automation and centralization, which may require some organizational restructuring and new policy. Thus it is vital to have the cooperation of top management.
The first thing to know is how much the company is paying for telecom-related services and equipment. Thus, all telecom invoices should be collected at a central location and added up. Few companies have a good grasp of their total telecom costs and finding this out can cause dismay.
To determine the validity of the invoices received, billed usage has to be compared against actual usage. In the case of telephone calls, the company must have a record of calls made. A computerized telecom expense management system does that by storing call detail records (CDR) generated by the company’s PBX system. CDRs contain information, such as the source and destination of each call, when it was made and its duration.
Most telecom carriers provide the option of issuing their invoices in electronic form, which means a considerable saving in labor. The invoice data is fed directly into the computer, where the TEM system compares billed items to actual usage and reports any discrepancies, so that corrective action can be taken. A good TEM system not only provides for traditional (wireline) telephone usage, but also for wireless, which is becoming more and more pervasive. Provisions now exist, for example, to create CDRs on cell phone calls.
Telecom invoices are not limited to telephone calls, but also charge for trunk lines and other carrier-owned facilities, such as switches and handsets. To verify these, the company must have an up-to-date inventory of its telecom resources. The system can reveal billing errors and also show up underutilized and overloaded circuits. Corrective action can then be taken to optimize resources.
Finally, in order to know whether the carrier’s charges are correct, it must be known what these charges are based on. Therefore, the TEM system must also contain rates and contract information.
Armed with this information, companies can expect savings of up to 30% on their telecom bills, which means the TEM software can soon pay for itself. Telecom expense management can require significant organizational changes and prior to embarking on such a project it would be wise to consult with a reputable TEM provider on the best way to proceed.

For more information on telecom expense management visit the Telsoft Solutions website at www.telsoft-solutions.com.

About the author:
Author, Peter Verhoeff, writes articles on the business benefits of telecom expense management systems and call detail record technology. More information can be found at http://www.telsoft-solutions.com.

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