What struck me was your approach. You looked at my [long distance] bills and outlined my alternatives, but you didn't promise anything. You asked about what sort of alternatives I would be comfortable with, and explained what my phone system could and couldn't do to manage calls. You estimated my possible savings and my time investment necessary to achieve the savings so I could see my ROI.

I am pleased with your service and the results. If you can satisfy a conservative CPA like me, I feel you can help almost anyone .

Howard L. Cornutt, VP and Treasurer
Panel Products International Corporation

Section Content

• Telecom Cost Reduction Introduction and Overview (This article)
• Telecom Cost Reduction Checklist
• Key concepts of Telecom cost Reduction
• CDR/SMDR (Call Detail/Station Message Detail Recording)
• Contingent Consulting and Auditing

Telecom Cost Reduction Introduction and Overview

Introduction

Prudent management strives to control or reduce the bottom line as much as it focuses on growing the top line, revenue. Teleconvergence helps our clients reach their marketing, technical and financial objectives.

Part of getting the most for your money is not spending more of it than necessary to reach your objectives. Another part is watching operating costs carefully. Still another is making sure that you are getting the most out of your contractual obligations and not being overcharged for what you’re getting.

The articles in this section present our perspective and approach toward telecommunications cost reduction and related issues. All the titles are self-explanatory, except the third, CDR-SMDR (Call Detail Recording), which describes a very useful tool for controlling and rebilling costs, combating telecommunications fraud, realistically estimating the number of lines and amount of bandwidth you really need, and preventing employee abuse of telecommunications services.

Beyond the scope of this section, but still related to cost reduction, you might want to look at the Strategic Telecommunications Planning (STP) section, especially the part on PSM (Procedural Strip Mining), the Teleconvergence low-end approach to Business analysis.

Another part of the STP section deals with telecommunications continuity business planning. While it’s more about controlling risk than controlling costs per se, being out of business for a few days or longer can be very, very, costly.

Overview

Satisfying your telecommunications requirements is one thing; overpaying to do so is another. The questions are basic, but the answers can be profound. Are you getting what you’re paying for, and are you being charged correctly? What alternatives do you have? Can you reduce costs without disrupting operations or breaking agreements? Are some agreements in place so onerous that it makes sense to cancel them and pay a penalty?

Similarly, are you controlling telecommunications abuse properly? Most businesses do not know how much abuse is costing them (Hint: most of it never shows up on any bill). Are you allocating or charging back telecom expenses cost-effectively? It costs some organizations more to allocate expenses than the expenses themselves! Have you taken steps to minimize telecommunications fraud and to prevent your systems from being hijacked?

Telecommunications cost control should always be part of an overall telecom management program, but it should never be the entire program. Here's a secret: ANYONE can save you 100% on your trunk and bandwidth costs by telling you to disconnect all your trunks and bandwidth. Intelligent management of facilities is something else.

Does it make sense to first reduce costs and then use the savings to make permanent improvements or to change systems? It might, but net savings are unknowable in advance and should never be guaranteed. For example, a company may be overpaying for some services, but compromising operations through underinvestment elsewhere. A company saving money on one hand and hurting itself on the other really isn't doing itself a favor.

While Teleconvergence may not be specifically retained to evaluate a client's existing cost structure, we frequently do so anyway, for two reasons. First, to understand the dimensions of a client's activities and costs and obligations. Secondly, because any unanticipated savings or opportunities to reduce costs are obviously eagerly welcomed by client management.

Managing costs and risk is standard business operating procedure. We're management consultants using technology to both strategically and financially satisfy our clients' business objectives. Would you really have it any other way?