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How can I effectively audit my telecom costs without making a career out of it?

Many companies find auditing telecom costs very difficult. Telecom industry expert Brad Tucker explains how to make staying on top of telecom costs as painless as possible.

How can I effectively audit my telecom costs without making a career out of it?

For many companies, the prospect of auditing telecom costs holds all the attraction of a root canal with no anesthesia. (And getting through it is almost as painful.) No one wants to do it and few people know how to do it, which explains why most companies substantially overpay for those services.

The easiest way of staying on top of telecom costs is to make someone to do it for you. If you're a big company, that's generally not a problem -- you have a telecom manager and that is there job. Problem solved.

If you're a small to mid-sized company, though, you've got a challenge. Here are some options:

Hire a consultant

There are three types:

  1. The first type is the classic "pay by the hour or project" consultant who will come in and work as long and hard as you pay them to. No mystery here -- you pay them, they do the audit and provide the results. Expect to pay between $75 and $250 an hour and hire them for at least 40 hours.
  2. The second type is a "savings share" consultant. Instead of an hourly rate, these consultants charge a percentage of savings (typically 30%). So if you're spending $13,000 per month now, and they show you how to cut it to $10,000 per month, you will pay them around $1,000 per month. Additionally, these consultants usually act as agents for the telecom carriers, so they make a tidy commission on both sides.
  3. The third is not so much a consultant as it is a service known as "telecom expense management." This is typically a monthly charge to handle all the tracking, auditing and even paying of your telecom bills.

Make the carriers do it

If you already know that your contract term is coming up, you can engage with a number of direct telecom carrier representatives. You should probably plan on meeting with at least three to five different reps, each for an hour, and you will need to provide letters of authorization to each rep. These reps are more than happy to meet with you and sink their teeth into your telecom bills. The upside: Free information. The downside: The information can be somewhat biased.

Work with an agent

These are companies that work on commission from the carriers. There are two types:

  1. Agent value added resellers (VARs). These are typically hardware vendors that represent a few carriers as an additional revenue stream. The upside is that you probably already have a vendor who acts as an agent. The downside can be a lack of focus on that area and a biased approach.
  2. Independent agents. These are companies (like my company, Qcentus) whose only mission is representing telecom carriers. They will usually represent a large number of carriers and should provide as unbiased approach as you will find without hiring a consultant.

Really, the key to a successful auditing plan is trust. Develop a good, trusting relationship with an outside source with whom you feel comfortable and whom you feel has your best interests at heart.

This was last published in June 2010

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