Intelligent (But NOT Contingent) Auditing

"Is there really any reason to pay someone for years just because they saved you some money once? We don't think so, either. Here's what we do instead.

Steve Bergman,

Contingent telecom auditing and cost reduction is a consulting service whose time has long, long gone. We did it.  We don't do it any more. And here's why.

These days, although contingent work may work out for the consultant, it's inevitably going to be a bad decision for the client.  Consider the basic equation. A consultant shows you ways to reduce costs. If you accept the recommendations, the consultant implements them and your bill does down. You pay the consultant a percentage of the monthly savings over the next two to five years.  In such a perfect world, everyone wins.

When was the last time you thought the world was perfect?

First of all, the promised savings occur only if nothing changes. Suppose your call volume goes down because you're had layoffs. Yes, your costs are lower, but it's because business is down and you're spending less, not because you're saving money, and especially not due to a consultant's recommendations. So do you owe the consultant more? Or less? Would you even feel right about paying the consultant the same monthly fee?  Is this really what you had in mind?

Similarly, if you start spending more, say, due to increased international calling, for example, does your savings percentage remain the same and so do you owe the consultant the same? Or do you owe more? Or are you saving less, and so should you pay the consultant less? Who decides? Such situations easily get very messy, and inevitably at least one party becomes dissatisfied.  And it's usually the party that has to pay the consulting fee regardless...

Here are three other very important factors to consider:

1. The Risk of Unforeseeable Consequences

Remember, the independent contractor you retain to perform the contingent work has no long term responsibility for negative or unexpected results.  If savings don't materialize, no payment is normally due.  As is frequently the case, however, the savings may materialize, but only at hidden risk. And regardless of your risk or loss, no matter how severe, the contractor does not have to compensate you.  Here's just one example:

Say your consultant recommends that you consolidate all your voice and data telecommunications on a single T1 circuit, eliminating separate lines and/or DSL. Let's even say it actually saves you some money, as promised.

However, a T1 is a single 4-wire circuit. If that single circuit is cut, or if one or both pairs of wires is mistakenly reassigned by the local phone company, it can take hours or days to locate them and restore service. With fiber optics, cross-connects are virtual, possibly complicating matters and potentially taking even longer to diagnose and resolve.

What happens when that single circuit goes down, as it inevitably will? You won't have data. You won't have the Internet. You won't have telephone service. Basically, you won't have a business. 

Now consider being without telephone and Internet service for half a day, much less a few days. Can you really ever save enough to compensate for the risk?

2. The Other Side of the Equation

Teleconvergence has expertise not only in risk analysis, but also in opportunity evaluation. Suppose we could show you how to increase productivity or how to add additional services or capabilities at no additional cost, or even at slightly additional cost?  Wouldn't you want us to present savings and opportunities to you for your evaluation?  The problem is, on a contingent basis, no consultant would even mention it because it wouldn't save you any money and thus wouldn't earn the consultant a fee.  Is this what you really want?

We won't allow ourselves to be placed in a situation where we cannot do all we possibly could -- or should -- for a client.  So we won't perform any contingent work at all.

3.  But aren't Audits worthwhile? Of course.

We will still audit, of course, just not on a contingent basis. And we audit not just bills, but contracts and leases and other obligations.  And even if your billing is correct, we still may renegotiate agreements for better future rates -- or free services -- because it's a buyer's market.  Teleconvergence clients don't have to be billed incorrectly to come out on top.

We insist on the right to give our clients any and all recommendations we deem appropriate, even for changes that may increase your cost because they might also greatly reduce your risk or eliminate future uncertainty. Clients are under no obligation to accept anything we suggest, of course, but at least, as our client, you'll be aware of your alternatives.

Businesses succeed in part because they profitably balance costs and benefits, risks and opportunities. Looking at only one side of the equation is like driving with one eye. A person can see, it's true, but without adequate perception.

If you decide to retain Teleconvergence for our perspective, why would you want us to wear blinders?

And if you like the way we think, why not give us a call at 503.750.2144 to discuss how our thinking may benefit you?