Telecom Savings Tip: Stop Writing Blank Checks

Some telecom services are like blank checks for your employees. 411 directory assistance, for example, can cost as much as $2.50 per call. Most commonly abused is Long Distance, both domestic and international. Employee use and abuse of these services can really add up. If you don’t have some controls in place, you may as well hand out blank checks each month.

Controlling such costs is actually easy. Simply block the services or monitor their use. Your carriers can block 411 and other such per-use services. Similarly, LD usage can be blocked altogether, or just block what you don’t need. If you do interstate but no overseas business, have your carrier block all international LD and leave domestic LD open. Or if you want employees to be able to make LD calls but know it’s monitored, have your carrier set up Authorization Codes for each employee (or by department). These codes are like passwords your employees enter each time they make an LD call. Your carrier can then provide a detailed report of each employees (or departments) LD usage. Even if you never look at the reports, you will reduce usage simply because employees know their usage is being monitored.

Use of LD blocks and Authorization Codes can also protect you from “toll fraud”, where crooks gain access to your phone system and relay LD calls through it. In a short time, they can rack up $thousands on your bill and you will not be entitled to a refund from your carrier.

Most of these controls, by the way, can also be done through your phone system (rather than the carrier). I generally go the carrier route because they typically implement at no cost and they also will take more responsibility for the cost of any usage that slips through.


Mark

PS: Checkout 800-goog-411 for free 411 calls. Short video: www.google.com/goog411

Telecom Savings Tip: Shield Your Bill from Invaders!

While scrutinizing an AT&T phone bill for a client recently, I discovered some mysterious charges on the very last page of the bill. Poorly labeled and weakly described were services for webhosting for $39.95 per month from a company called Bizzfinders.com. These charges had been billed for over two years without anyone noticing. In this case the charges were in error and I was able to obtain a refund for my client, but I have seen other cases where the charges were downright fraudulent (referred to as “Cramming”). This practice of the phone company billing for other companies is referred to as “third-party billing” and is legal when done properly. Legal or not, you want to be aware of it.

So first of all, you need to read your phone bill every month. Carefully! These and other types of charges, legitimate and not, can find their way onto your bill and you need to catch them early. If you see something on your bill and you don’t know exactly what it’s for, call the carrier and get the explanation you are entitled to.

Second, you can protect against surprises like the Bizzfinders charge above by having your carrier put a block on Third-Party billing. It’s not total protection against over-billing, but it does plug one of the holes. If you want to plug the rest of the holes, check back periodically as I will be posting more tips on how to keep your telecom costs under control.

Mark
www.VDLconsulting.com

The Rodney Dangerfield of Professional Services

I tell ya, TEM (Telecom Expense Management) gets no respect. When I talk to people about TEM, I usually get a blank stare. Most people just haven’t heard of it. The industry has an image, or at least a visibility problem. Considering it’s a billion dollar industry and most business people haven’t heard of it, it must.

On top of that, the TEM industry’s prevailing revenue model uses contingency-based fees (% of savings). Those who understand the industry know this to be a win-win deal, but to others it might seem, well, perhaps a bit unsavory. I can’t say I completely understand this, but I think maybe it’s because it has the ring of “free” to it, and everybody knows there is no free lunch. If someone is offering something for free, there must be a catch, right? So is there a catch with TEM?

Here’s the deal. Businesses are skeptical that there are significant savings to be found in their telecom areas, enough so that they are unwilling to risk investment to find out. TEM providers, however, understand (based on experience and industry studies) how common waste is and how likely it is they will find significant cost savings for the average enterprise. So they accept the risk. It’s that simple. TEM providers are simply playing the averages. They have no secret intention to up-sell services or other ulterior motives (well, of course some might, but generally not). They don’t need any when they’re able to make a “normal profit” by sticking to TEM.

Besides, it’s not free. Sure, if no savings are found, there are no fees. But if savings are found, there ARE fees. In any case, it’s all upside for the client and there’s no disrespect in that!

Does HR do your taxes?

Of course the answer is no, because they obviously don’t have the expertise. So why does IT manage your telecom area? Not an accurate comparison, you say? Surprise! IT and telecom are not the same things. Case in point, your IT guys don’t manage your PBX as they do your servers. Rather, they have a PBX vendor do it.

The point is you have IT managing something they don’t really have the expertise for. Sure IT understands the data-oriented side of telecom (data circuits, internet, etc.). But the voice side is far more detailed with numerous line types and features on varying rate structures across local, LD and especially cellular. In addition, many IT managers lack the administrative expertise required to manage all services at the detailed level necessary for controlling costs. There can be dozens, even hundreds of billing elements on a voice telecom bill. Ensuring contract compliance for all those elements is not simple.

So what? Well, the problem is this lack of expertise leads to overspending. Failing to put in place processes and systems for proper record keeping, invoice review and approval, ongoing capacity analysis, etc. is essential. Unused lines, double billing, excess capacity and unnecessary features are common examples of why failing to do so is very expensive. TEM Industry consultants estimate the average company wastes 1% of revenue on such inefficiencies.

My advice? Confirm whether IT has things under control or not. Bring in a TEM expert to do an assessment of your IT departments administrative processes – there should be no charge. You’ll either find out there is room for improvement, or confirm that things are under controlled and costs are minimized. Either way, you need to know.

Google This: TEM

Alas, my website will not come up, but this is beside the point. The point: Are you surprised by the pages of results for TEM (Telecom Expense Management)? I’m guessing you have never even heard of TEM. No worries, most people haven’t. But hopefully now Google has shown you it is a well established discipline with an entire industry behind it, no different than tax preparation.

TEM is simply the management of telecom costs using thorough and systematic methods. Like anything, it ranges from employment of basic tools and practices to very complex methods and software systems. Like other disciplines, you can take the do-it-yourself approach by investing in people and systems or you can simply outsource the entire thing. I happen to take a hybrid approach whereby I get a handle on everything for my clients, then hand it off to them to manage going forward.

I can’t say what the right approach is for your business, but I can tell you this. Take some approach. Any approach. Just do something, because if you aren’t actively managing your telecom costs, then you are mis-managing them and wasting money. Overcharging and waste in telecom is ridiculously common. A Gartner Group study found 80% of telecom bills have errors. My very first client cut their costs by over 50%. Luck? I think not. Every company I’ve ever looked at had some amount of waste. Why this is true is a subject for a future blog. For now, it’s enough for you to know that TEM is out there and well worth looking into for your company.

Be Well,

Mark

Welcome & Thanks...

Welcome to my first Blog post!

You probably found your way here by way of my new website: http://www.vdlconsulting.com/. If so, I'd love to get your feedback on what you like and don't like about the site. You can post comments here.

Special thanks to those of you who gave me input as I was putting it together. You're the reason it looks as good (or bad ;)) as it does!

Be Well,


Mark

"The New Economy"

I attended a seminar today on networking given by Dave Sherman (http://www.davidshermanspeaks.com/), a local author and speaker. He's a great speaker and I enjoyed his presentation. He was discussing our beloved recession and commented about how some people say it represents "a new economy". He asked the class, "if that's true, what kind of economy is it?" The room was silent. He laughed knowingly, then said, more or less, "That's right. Nobody knows what the new economy is. So make it whatever you want it be." He believes it presents a huge opportunity for those who choose to turn it to their advantage. I'll take his kind of energetic optimism any day over the doom and gloomers! Like the principal at my daughters elementary school says every morning on the announcements, "Make it a great day or not, the choice is yours." I think I'll steal that and change it a little...

Make it a great recession or not, the choice is yours!

Be Well,


Mark