When was the last time you actually looked at your telecom bills?
Meaning, when was the last time you took a look at what you’re paying for? Not just the total number printed at the bottom to make sure it was in line with that you’ve been paying over the past year or more, but the actual itemized charges for your organization.
Most organizations have an ‘if it ain’t broke, don’t mess with it’ mindset when it comes to their IT and Telecommunications products and services. However, a more thorough analysis of your invoice is the first step in determining if you are overpaying for the products and services you are purchasing. You also might be asking, “If there are no end user complaints and pricing hasn’t jumped significantly then why do you need to bother taking a deeper dive into these bills?”
We get it. Many organizations are resource constrained and don’t have the capacity to fully audit and assess the function and viability of these purchases. Similarly, it’s difficult to invest time to learn what pricing is realistic in today’s market, or what alternate solutions might be available to better suit your business needs.
Unfortunately, this can lead to over paying for services you don’t need, aren’t using, or (worse!) are billed in error.
After engaging with numerous businesses where this type of assessment was warranted it was clear that there are best practices that can be employed to reduce over spending. Laid out below are a few tips on what to look for on your bills and how to ask the right questions.
- Understand Your Bill
This is the most important step to potentially reduce your monthly cost. If you do not know what you are paying for then how can you know what you should be paying for it? You should be able to break down all services being charged including taxes & surcharges and then understand how pricing aligns with the contract and if the contract is still viable.
Here is a prime example of why understanding your bill is so important. An organization had been purchasing toll free services from the same vendor for 8 years. They had two rounds of 36-month term contracts with the last having expired 2 years prior to consultation. Immediately, the invoiced services and charges were compared to the contract pricing terms and conditions. This resulted in the discovery that pricing for each call minute increased by almost 200%!
The organization was no longer receiving contract pricing and had defaulted to the supplier base tariff rates. If someone actually took one call example and calculated the unit cost, they would have identified this impact immediately. Unfortunately there were no contractual obligations on behalf of the supplier to thoroughly inform the client of this increase. It was simply stated on one of their invoices that pricing would change due to contractual terms being met. The client also did not notice anything due to the fact that the monthly service charges stayed the same and only usage rates increased.
- Define Your Requirements and Optimize Your Inventory
- What services do you use frequently and need on a regular basis?
- When was the last time you had a need for that specific service?
You can always put the task on your supplier to review utilization of specific services. To illustrate this point, one notable consultation included a customer with 30 phone lines. By simply calling each line to check if they were ringing to a destination it was uncovered that at least 50% were either disconnected or rang with no answer. When taking that “deeper dive”, we uncovered some of the lines that were no longer connected had continued to bill. By rightsizing the needs of the organization, savings were identified, while some lines were able to be repurposed without having to bring in new services.
- Know the Market
There are many suppliers in the market offering the same services your business needs and have local representation. You can achieve the same or better results with updated technology and at a lower cost.
For example, when buying Internet services for network redundancy or failover, consider DSL or broadband versus dedicated services. You do not need to focus on the BRAND NAME products or what you see on the first page of your Google search. If you invest a minimal amount of time to perform a market check, you can cut your costs and improve overall business functionality.
- Ask Questions
Although it might be unpleasant, if you are unsure what you are looking at when reviewing your bill, ask a customer care rep. They may not directly provide you the answer you’re looking for, which may result in some navigating to the right person, but your supplier will explain what you have and should offer additional competitive options. If you have dedicated sales teams, they should inform you of new technology that is a better alternative at a lower cost. Most telecom suppliers are looking to sunset old technologies, as it is a higher cost for them to maintain. Therefore, take advantage of the experts.
Lastly, understand your bill. Yes, this is the same as the first tip. If you make changes and are successful in lowering your bill, then make sure to continue to audit it monthly. Your requirements might change, the supplier may start to apply fees differently, and technology may change with new services becoming available.
Need help starting your own custom audit? CU partners with Source One to offer our members best-in-class telecom management. Are you ready to stop overpaying and reduce your telecom costs? Start saving today!
Leigh Merz: IT and Telecommunications Consultant at Source One Management Services
Leigh is a Consultant for Source One Management Services, LLC with over ten years of spend management experience. Specializing in telecommunications, administrative expenses, and small parcel, Merz helps clients reduce costs through strategic sourcing and expert contract negotiating. Beyond supporting client savings objectives, Merz is go-to resource delivering further value by enhancing supplier relationships and identifying outside the box solutions.