Factors such as bundling services and keeping copies of contracts have their roles to play in reducing telecommunications costs, but many organizations are still failing to investigate a range of unnecessary hidden expenses, and the complexity of a telecom category management process for enterprise procurement teams continues to increase.
Whether your organization is paying for disconnected services or suffering from internal usage abuses, the six cost reduction methods listed in this article will help to reduce telecoms costs, improve total contract lifecycle value and optimize technology spend.
Despite the difficulties associated with telecom cost management, we will also look at the practical solutions to unlocking significant savings on your technology and telecom spend.
To truly optimize this process and maximize reductions, working with Thinking Machine Systems automates the investigation and visualization of data as well as simplifying strategic recommendations which are quickly actionable.
The ‘Telecom Contract Merging’ trap
It is common for organizations to move to a new mobile contract without merging their old and outstanding pricing.
Depending on the number of services contained within these contracts, unmerged elements can be hidden for a long time and result in significant unnecessary spend.
Making sure to always check that existing services are merged with any new contract is a simple way to reduce telecommunications costs.
Investigating unusual usage of your technology and telecom assets
When working with a large client recently, we identified four mobile phone services that the organization believed to be part of a data plan.
These services were in fact making automated calls on the hour every day, each costing in the region of £1,000 a month.
The cause of this issue was a simple misclassification of plans, which turned out to be an ongoing and costly error.
The solution to this problem is also a simple one, requiring teams to check usage regularly and ensure that the right plans have been tagged for the right services.
Tracking unused telecom assets such as business mobile phones
When employee device policies are in place, it is very common for old phones to be overlooked when a new device is issued.
This may happen in the case of a promotion or a move between different departments. Another way this can happen is when an employee leaves an organization, and their phone contract is not cancelled or reallocated properly.
As a result of these scenarios, organizations can be left paying for expensive contracts that nobody is using for years.
These costs can be prevented by aligning user IDs with billing patterns, which can result in significant telecom cost savings.
Preventing service abuse
Organizations should also check for potential service abuse among employees, which could include the use of multiple services for personal gain. Cases of abuse can be highlighted by matching user IDs to billing data and investigating instances in which individuals are using more than one mobile phone or other devices linked to contracts. This unnecessary cost can also add up to significant amounts and be ongoing for multiple years, making it important to investigate routinely.
Stop paying for unnecessary telecom products and services
In another client case, the organization had 4,000 telephone lines spread around the UK, and they were paying £4 per month for each line to have an enhanced care level.
This package included a better response time for faults among other advantages, but the product was redundant in this case because of an overarching care level arrangement.
This serves as a primary example of why it is important to investigate the value that is being generated by services, making sure that costly duplications are not leading to a long-term contract value leakage.
Identifying disconnected services
It is also common for organizations to be paying unknowingly for services that have been disconnected.
In one instance when working with a customer, we identified 600 telephone lines that had not recorded any usage for the past year.
Lines like these can often be overlooked if they are housed in small sites or remote locations. All organizations can simply call these telephone lines and find out which ones are still operational.
Powerful spend analysis solution with contract value intelligence for Improved strategic supplier relationship management
When you combine all these telecom cost reduction methods with a category management process, organizations can save between 15% and 30% of their overall telecommunications spend across mobile and fixed line services.
These significant savings can be identified as part of your overall category strategy without even looking at the actual prices being paid for services, and yield further savings potential through the negotiation of new deals with your current suppliers.
While these telecom cost reduction opportunities can be explored and executed on manually, the process can be arduous and time consuming for procurement teams and category management.
Using our Spend Analysis and Contract Value Intelligence machine learning and AI-driven Knowledge Model, Thinking Machine Systems automates this process, identifying both immediate and long-term savings opportunities.
We can either take immediate action on these opportunities on your behalf, or your own expert teams can be armed with these valuable insights. Whichever approach suits you best, our contract lifecycle management software can evolve with your ever-changing digital procurement strategy.
Find out more by taking an interactive tour of our Spend Analysis and Contract Value Intelligence platform and uncover more use case on we can help you reduce your telecom spend without changing suppliers.
