Opinion: Five telecoms cost management facts for executives and ICT managers

Brett Thomas of Unison gives 5 telecom cost management facts aimed at executives and ICT managers.

July 29, 2011

By Brett Thomas, Managing Director of Unison.

  1. The cost of mobility will surpass that of fixed line:

Wireless costs are quickly surpassing fixed costs as spending on wireless communications continues to grow at a rate of 30% or more per year. (Gartner)

Most companies have a strategy to manage fixed line costs because up until now this is where the greater proportion of their costs have been. Wireless communications are seen as a tool that influenced productivity, and due to the lesser cost the strategy in most cases is capitulation – the organisation gives the employee an allowance and perceives that as a control mechanism.

The truth is that most of those allowances are primarily used for private usage; the tendency is that the user manages his personal exposure by utilising fixed communications infrastructure when back in the office. This negates all the intended benefits of mobility for companies. Gartner recommends that the two main areas focused on should be policy management and telecom expense management.

  1. Business will continue to deal with billing errors:

If proactive auditing practices are not in place, enterprises could be forfeiting at least a million rand for every R 10 million spent. (Gartner)

Due to telecom service providers having some of the most intricate invoices any business could face, billing errors are a challenge that will continue to surface. It is standard practice that the billing of telecom services includes hardware spread over an array of locations. The ability to track and manage these services are compounded by services of which no physical presence are provided.

Although seen as a benefit and playing an important role when a service provider is considered, elements such as volume based discounts and time based utilisation costs further compound the complexity of billing services. Furthermore, the moves and changes surrounding employee status, whether it is an inter-departmental change or an employee leaving the company, are often not tracked and result in superfluous or unallocated billing.

  1. It is a fallacy that telecom expenses are not an executive problem:

By virtue of the fact that this expense is potentially one of the top expenses incurred in the running of a company, it should get the attention of company executives and be reviewed regularly at management meetings. This expense is often one of the worst managed within companies. By automating and creating concise reports that show the company’s position at a glance would enable executives to strategically tackle these costs at high level management meetings and create tangible results.

  1. Despite an even more competitive telco and service provider environment, the cost of telecom spend continues to escalate:


Despite an increasingly competitive environment in the telco and communication service provider environment, telecom costs are on the rise.  Part of the problem is a continuously moving target with regards to applying new technology and related services – companies tend to respond to past and present needs when deciding on

new infrastructure and supporting services, as opposed to applying strategic decisions which anticipate the future of the company’s telecom consumption.

  1. Company telecom strategy should mirror needs and not technology:

Most companies tend to make their strategy fit around vendor specific technology or service provider technology as opposed to developing a strategy and then choosing vendors or service providers and technologies that dove-tails the company’s strategic requirements.

This also becomes a question of “Who guards the guards?” As soon as a particular technology vendor or service provider is chosen to deliver on infrastructure demands and is asked to assist with strategy as a consequence, the opportunity for impartial decision making is lost.

Choosing a company that manages a multitude of vendors and technologies is ideal; this agnostic profile will ensure that any input into company strategy is needs driven and not around the desire of vendors or service providers.

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