Telecom Expense Management expert, Aurora Kendrick James (AKJ) has called for more IT and Finance Directors to concentrate on long-term telecommunications savings strategies rather than one-time price reviews.
“Too often,” says AKJ Managing Director Matt Atkinson, “IT, Procurement and Finance Departments undertake one-off price reviews or audits which result in short-term price reduction but ignore the underlying problems that drove up costs in the first place.” Of concern for these companies is that many procurement decisions are also based on poor or inaccurate management information, and fail to take into account the changing nature of telecoms usage and networks.
Indeed, AKJ believes that many IT and Finance Directors do not have a clear understanding of their real telecommunication usage and costs, and this lack of visibility often results in significant wastage.
“Most wastage and excess cost,” argues Atkinson, “comes from issues such as over capacity, misuse, billing errors, poor processes and a lack of clear management information. Changing suppliers is often seen the quick route to saving money, but often fails to deliver the expected results. However, devoting management time into gaining a real insight into network costs will generate significant long-term sustainable savings independent of any change of supplier.
AKJ advocates a policy of providing greater information and education for staff and managers on the best use of telecom services; as well as undertaking regular network audits, maintaining ongoing performance monitoring and making users accountable for costs by accurately allocating costs across a business. Taken together these measures can deliver year-on-year savings of around 20 per cent whilst ensuring that the business can also model the impact of future changes in technology.
Atkinson believes that for a typical mid-sized UK corporate spending some £500,000 a year on communications; a formal telecom expense management programme will usually deliver first-year savings of around £100,000. And with Yankee Group estimating enterprise telecoms spend in the UK at some £5 billion in 2006; UK plc could save in the region of £1bn annually.
“And this is just the start,” Atkinson concludes. “Once you are in control of your costs and usage, you will be able to reap the benefits of improved staff productivity and efficiency, have a better understanding of your company’s communications and be able to make more informed decisions on what new technology and services you should be investing in to gain a competitive advantage.”