Going Beyond Traditional TEM for Deepest Cost Savings

By TMCnet Special Guest
Jonathan Shaw, principal at outsourcing advisory services firm Pace Harmon
  |  July 01, 2011

This item originally appeared in the JULY issue of INTERNET TELEPHONY

With CIOs focused on cutting expenses, many companies rely on telecom expense management to better control their substantial telecom expenditures. While TEM providers deliver bill auditing, provisioning and inventory management, more comprehensive cost-cutting activities frequently fall outside their core offerings.  Additionally, with limited integration into enterprise network management processes, TEM providers can lack the visibility necessary to identify many savings areas. To avoid leaving money on the table, companies should ensure they address the following five often-missed telecom cost-cutting opportunities.

Opportunity 1: Combat Off-Market Rates

While TEM providers specialize in catching invoiced amounts that don’t match up with contracted rates, most will not monitor for rates that are above market. Companies usually negotiate aggressive pricing for heavily used services, with the corollary that less frequently used services can receive lesser discounts. Issues arise if a company migrates to these more expensive services, for example as a result of a network optimization or acquisition.

Companies should request that their TEM providers examine invoices to identify high-volume spending areas with rates that appear to be disproportionate. These price elements should then be reviewed as potential candidates for further negotiation with the provider.

Opportunity 2: Remove Unused Service

Telecom services should be periodically compared to evolving business needs. For example, one Fortune 100 company found that a dial-up client (with associated monthly charge) continued to be part of the base image for company laptops when only 5 percent of the staff used the service.  

Companies can mitigate this issue by educating their TEM provider to better enable them to identify anomalous service usage. However, the onus remains with the business to verify the business value of its services portfolio.

Opportunity 3: Eliminate Over-Provisioned Services

In today’s business climate, many companies are reducing headcount or falling short of growth projections or causing a lower demand for telecom services. Companies can trim 15 to 40 percent off service cost by right-sizing voice trunks (increased use of cell phones as primary business devices leads to marked decreases in traffic) and WAN head-end sites (where small volume decreases from each remote site can lead to a substantial shortfall in the aggregate).

Circuit utilization statistics for the WAN and voice trunks should be tracked against revised demand and future projections. For underutilized WAN circuits, determine whether a lower capacity service can be substituted cost effectively. Additionally, perform a trunk dimensioning exercise to identify the number of trunks needed for busy-hour traffic at each site and disconnect excess trunks. This exercise may be performed in conjunction with a review of VoIP (SIP) trunking as an alternative to traditional local and long-distance voice access.

Opportunity 4: Optimize Wireless Voice Pools


With wireless devices and services representing an increasing portion of telecom budgets, pooled voice plans are pivotal to optimizing wireless spend. TEM providers should already be ensuring all corporate-liable voice users are incorporated into the enterprise’s pooled voice plans. Many will also claim to ensure that the allocation of users to plans within the pool provides the lowest average cost per minute.   

Companies should validate their enterprise contract includes zero-minute shared plans, which enable the pool of minutes to be obtained from higher minute plans (with the lowest cost per minute). Re-optimization of the pool with zero-minute plans can frequently reduce the cost per minute by up to 15 percent. Another important step is to periodically analyze historic usage to better estimate the volume of minutes required to cover monthly use.

Opportunity 5: Engage in Wireless Demand Management

A fundamental way to reduce costs is by reducing the underlying demand for the service through a corporate wireless policy aimed at cost awareness. Establish guidelines such as limited reasonable personal usage and avoiding 411 calls from mobile devices. Also include guidelines that will reduce international roaming charges (e.g., utilizing landlines when available, using VoIP clients on WLAN-enabled devices, avoiding downloading attachments over cellular services). Once the policy has been developed, distribute it to the user base and request they acknowledge review of the document.  

Further, it is common for a select group of employees to consume a disproportionate amount of the overall corporate wireless spend. In many cases with corporate liable plans, users are simply unaware of the costs associated with their wireless usage. A brief follow up with these outlying individuals will often yield substantial savings.

Slew of Partners Go Anomalous

Anomalous Networks Inc. has formed a number of key partnerships with leading telecom expense management companies throughout the global market. For example, Ovation Wireless Management Inc. plans to begin using the Telicost solution to provide its U.S. customers with a central, real-time view of wireless expenses, including international roaming, projected data or voice plan overages, and SMS abuse. In addition to Ovation Wireless, Anomalous Networks has also signed agreements with Australian-based Tracknology; Brazilian TEM firm TeleGestão; and Cotelsa, a U.S.-based TEM company serving the Caribbean with a subsidiary based in Santiago, Chile, known as Telenet Chile Ltda.

HTLT Highlights Optimizer Pro

Check out  HTLT’s Hills-B Optimizer Pro to overcome deficiencies associated with the use of Erlang-C and other classic queuing models. The tool is a way to achieve realistic results when performing the four major steps involved with effective call center management. Most workforce management systems use the Erlang-C model for staffing projections, but Erlang-C cannot be used for all of the what if scenarios that address information on variability and extremes, because the results provided by the model are only averages of key performance measures, HTLT officials say.

Ezwim (News - Alert) Unveils Partner Portal

Expanded capabilities of Ezwim’s Partner Portal will help Ezwim’s business partners deliver high-value telecom management solutions for clients, according to the company. The Partner Portal was designed to enable business partners to easily set up and manage services successfully. A growing number of businesses and organizations across several industries are turning towards web-based telecom management to manage telecom costs and assets.

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Edited by Rich Steeves