Guest Column - Leave it to the experts

There are few expense-control activities that are more frustrating than monitoring and reconciling communications expenses. Telephony, data services and mobile bills are arcane and complicated, and they are rife with errors. Finding those errors costs plenty in technology and staff time.

Industry analysts estimate that 7% to 12% of communications bills are in error due to a variety of issues. Since most companies establish a baseline for their communications expenses using current bills, and then measure variances from the base, the problem can be perpetuated.

A mid-market or large company often has literally dozens of communications suppliers and thousands, or hundreds of thousands, of physical and virtual assets (circuits, services and mobile devices) that are billed each month. With converged communications, the problem becomes more complex.

Companies can save significant money if communications cost errors are identified and mistaken billings corrected–but most organizations do not have the internal resources to do this cost effectively.

There are three possible approaches to communications expense management. Companies can invest to build in-house capabilities for infrastructure, head count and expertise. Or, they can turn to a hosted environment. This has the advantage of freeing up the IT resources but still requires in-house expertise to support the complex communications-management process. This is a workable step if only as an interim solution–if there is an existing competency within an organization.

The third approach is to outsource communications expense management. This approach can have several benefits, including:

providing an automated, business process-driven solution;
access to the technology to capture the more detailed contractual and billing details than is possible otherwise, and to provide analysis at a more granular level;
establishing electronic links with service providers to automatically capture invoices and compare them with contract terms and, equally important, the company’s actual communications inventory;
reconciling bills with the contracts;
guiding management and reporting on problems and issues, and ensuring that all erroneous billings are corrected in real time; and
bringing overall costs down.

While implementing a communications-management solution in-house or through a hosted model may provide the same technology underpinning, the real ROI of outsourcing comes from the following:

Often, the terms and tariffs negotiated during the contracting process are not applied to the bills. Another common situation is that companies have national master contracts but, when an office is added, it is assigned a non-discounted rate.
Outsourced providers offer the capability to develop comprehensive inventories of both physical assets and virtual assets to recognize anomalies.
The staff and know-how is available to immediately and efficiently address an issue with the billing that was found by comparing the usage, infrastructure (inventory) and invoices. Dispute resolution is the most time-consuming, complex and frustrating part of communications management. Disputes must be properly submitted, documented and tracked. Most companies are paying late fees or spending months trying to recover disputed payments. By working directly with the carriers for several clients, managed service companies have the processes and the expertise to deal with billing issues.
Client companies are saved from having to maintain staff to handle the communications management part of the program. Further, managed service providers have the benefit of seeing a broader cross-section of the industry to keep them on top of developing trends.

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Chuck Machlin is senior vice president, expense-management solutions, at Avotus Corp., Mississauga, Ontario, Canada. He has more than 20 years of experience in operational support systems and in applying supply chain management concepts to telecommunications.