The ABC of Managing the Telecommunications commodity group: What you need to know

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This is the first in a series of articles brought to you by SmartProcurement dealing with the ABC of managing your organisation's telecommunications costs efficiently. Areas to be covered include:

  • A - Awareness:  Being fully informed on this complex and highly technical services commodity group.
  • B - Business Communications:  What are the requirements for your organisation?  Does your present ICT infrastructure meet the bill?
  • C - Cut the Cost:  Are you getting enough 'bang for your buck, or are you being over-charged due to the inefficiencies and confusion that are rife in this industry?"
Awareness - The discipline of being fully informed

Telecommunications is a commodity group that lies at the heart of the global knowledge economy.  Without effective management, organisations can lose millions in revenue, not to mention the impact this has on their competitive advantage in the marketplace.

Broadly speaking telecommunications relates to several channels available in the market:
  • Fixed-line communications;
  • Cellular networks;
  • Wireless networks;
  • Convergence technologies; and
  • Satellite linkages.

Due to this complex structure, disparate costing and management issues will arise.  They can vary from:

  • Ever increasing overall costs, despite promises by service providers on efficiencies and savings.
  • Billings are not standardised and thus they are very confusing to manage.
  • New legislation continuously impacts on the billing variables, e.g.:  SNO, Voice Over Internet Protocol (VOIP), Radio links, Internet Service Providers (ISP) and Value Add Networks (VAN).
  • Good independent advice is hard to find - the networks and their service providers are always pushing something new at you.
  • The complexity of the different service provider bills makes it very difficult for your people to consolidate and pay the correct amount.
  • Budgeting is typically done on a "cost plus basis", and the 'plus' factor can vary from account to account.
  • Telecommunications are generally not managed on a holistic basis within organsations.

To get yourself started on the right track it is advisable for you to benchmark your telecommunication costs across the entire organisation.  This you do by conducting an audit of your organisation's entire telecommunications charges for all services and equipment.  The immediate aim of this exercise is to ensure your account department has a holistic view of all your bills, and importantly, to recover any overpayments you have made and, to reduce future bills.

Most service providers have implemented multi-faceted accounting systems for their various services.  Implementing complex systems, tariffs, policies and regulations often results in tariff discrepancies and incorrect calculations, which leads to unjustified overcharges for the client's account.

No Cost  / Risk Auditing Services

To identify incorrect billing and charges and, to negotiate refunds due, invariably requires a highly specialised service which is dedicated to just doing that.  This type of auditing is a time consuming and frustrating exercise so it is advisable to recruit the services of dedicated SA telecommunication specialists.

A detailed telecommunication's audit will require an expert to analyse and examine the data with the primary objective of identifying any refunds/credits that may be owed from the telecommunication service providers due to overpayments resulting from incorrect billing.  This process is then repeated across all the invoices of the telecommunication services to identify discrepancies.  

The good news is that these audits can be sourced on a risk-free and 100% contingency-basis; you only pay an agreed percentage of the final refunds due to you.

If your organization thus has a telecommunications account of more than R20,000 per month it is essential for you to conduct a 'Telephony Audit' without delay.  

You can do this by simply e-mailing us at admin@smartprocurement.co.za and we will initiate the process by connecting you with a reliable specialist telephony auditor.  In taking this step you will, at the very least, come away fully informed at no expense to you.

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