For enterprises and service providers recovering from the human, business, and organizational impacts of COVID-19, is now the right time to start planning an audit of telecom-related costs?
The answer is “yes“, and it is timelier than ever before.
COVID-19 has precipitated important changes in telecom spending that can have big impacts on a company’s bottom line. According to industry analyst Gartner, while overall telecom spending is forecast to decline in 2020, the pandemic has spurred remote working, which is increasing telecom spending on VPN’s, broadband, and cloud-based telephony and messaging and cloud-based conferencing. These changes in spending mean that not only are there new expenses and new types of telecom services for enterprises and services providers to keep track of – there are also important shifts in utilization that need to be accounted for. There may be less future utilization of capacity to connect office locations, for example, because of the shift to remote working. Companies may now be paying more than they need to, for services they will not use as much of, if increased telecommuting becomes a permanent part of the company’s culture. Last but not least, is the increased necessity of cost control. While the economy is showing signs of recovery, all businesses would be wise to prepare for a slow return to normal by reducing expenses as much as possible.
The Value of A Strategic Telecom Expense Audit
Now is the right time to take a hard look at your telecom expenses. But how you do the audit matters.
A good telecom audit should provide a truly independent assessment of telecom spend. That means whoever is doing the audit should be able to look at the expenses with an unbiased perspective and be able to ask tough questions about why decisions were made. This may be someone from inside the organization who has enough distance to be objective, or it may be an outside consultant. Whoever is doing the audit also needs substantial expertise in wholesale or “intercarrier” telecom pricing, because the pricing large service providers charge each other is the best indicator of a telecom service’s underlying cost.
Beyond independence and expertise, there are three key factors that ensure that a telecom audit is truly strategic and maximizes not only cost savings but also telecom network productivity. I call these “RQE” for “Rate”, “Quantity” and “Existence”.
Rate. This part of the audit looks at the key issues such as:
- “Am I paying the rate I negotiated?”
- “Is the rate I negotiated still competitive given market conditions?”
- “What happens to my pricing at the conclusion of the initial term?”
Quantity. This considers the often-overlooked issue of “are you paying for too much of a good thing?” A strategic audit will validate not only your pricing but also check that you are paying for what you have actually had provisioned and are using.
Existence. A strategic telecom audit will validate your internal “move-add-change-disconnect” or MACD process to ensure (for example) that you are not paying for a service that you disconnected months ago.
The Covid-19 pandemic has created unprecedented changes in the ways we do business. For many companies, those changes are having a substantial effect on the ideal portfolio of network services, including increased expenses for distributed services, and decreased demand for centralized networks. This is the ideal time to re-assess your telecommunications spend and plan a new, flexible, resilient architecture. The first step is to fully understand your current telecom environment, through a thorough, professional audit conducted by an independent, experienced firm. The focus of the audit should begin with Rate, Quantity, and Existence, as described above, and include sourcing and planning conversations with your network team. Importantly, the audit and planning generally substantially reduce telecom expense, often with increased service levels- meaning newer, faster, more reliable technology at a significantly lower cost.
Since our founding in 2004, we are proud to have saved our clients more than $900 million through telecommunications audit, optimization, benchmarking, site survey, and sourcing efforts. Axiom has the experience, industry knowledge and best-in-class tools to identify direct savings for our clients within the carrier and enterprise markets. We focus on finding immediate savings while developing more complex strategies that enable even greater savings overall. Our efforts result in optimization opportunities, sourcing changes, and dispute resolutions. Our Industry knowledge of both wholesale and enterprise markets translates to greater savings for our clients. Comprised of seasoned technology experts, our average analyst has over 15 years of auditing experience, with technical skills in SQL/Data extraction environments and is well-versed in MSA Templates/Tariffs/FCC Rulings. Our team successfully closed one of the largest wholesale settlements awarded for a Tier 1 carrier, saving a single client more than $50 million. In addition, we have successfully negotiated a $6 million settlement in favor of an enterprise client.
Interested in learning more? Find us at www.axiomcgi.com.