Six Ways To Reduce Your Corporate Telecom Expenses
Posted by
Jonathan Shaw
December 15, 2009
5. Consolidate and tackle Plain Old Telephone Service (POTS)
There is no doubt that controlling expenses for the small local service (e.g., Centrex, POTS, 1MB, ISDN BRI) is a tedious challenge. Each office location will likely have a separate multi-page invoice, provided by one of the ILEC or CLEC providers, each with their own arcane service codes and billing practices. Individually, each invoice is small, but in the aggregate these services might total half a million dollars in annual spending. Our experience suggests much of that spending is for unused or unnecessary features, but the challenge has always been consolidating the data into an electronic format that enables bulk analysis, filtering and reporting. Local service aggregators, e.g., Ernest Communications, Granite Telecommunications, that buy wholesale local service from diverse local providers and resell service on a nationwide basis to large enterprises, provide this service. The consolidated offering comes with aggregated billing and reporting that enables you to run queries on the configuration of all POTS lines, find the unnecessary services and contact a single point of contact to cancel them, irrespective of the underlying local facilities provider.
6. Right size your long distance voice access
Long distance (LD) voice service can be delivered via dedicated or switched access. The former provides a reduced rate per minute in exchange for a fixed monthly charge, while the latter has a higher per-minute cost but with little or no fixed monthly fee. The breakeven point is dependent on the negotiated rates, but is generally around 12,000 - 15,000 minutes per month. If you have dedicated access at locations with volumes below this amount, then changing to a switched configuration will likely generate savings, and vice versa. For dedicated access locations with higher volumes, periodically compare demand with available trunk capacity. E-mail, IM and cell phones continue to erode business call volumes, leading to excess trunking. Most providers have automated reporting tools that directly provide trunking recommendations or enable you to easily conduct Erlang analyses and identify over-trunked sites. As an alternate to such tools, call detail records can be used to calculate the maximum number of simultaneous calls occurring each month. A recent comparison of actual voice usage versus LD trunk capacity for a 100-site voice network yielded a total of 73 LD PRIs that could be disconnected, driving savings in excess of $200,000 per year.
A targeted review of the telecom environment may not achieve the dramatic savings associated with a wholesale network redesign or a competitive procurement. However, taking the time to perform an end-to-end review of your telecom environment will almost always uncover savings opportunities that can be implemented simply, safely and provide an immediate return on investment. Next week, we will discuss five additional cost-cutting opportunities related to the WAN.
Dr. Jonathan Shaw is a principal at Pace Harmon. He holds a Ph.D. in microwave spectroscopy and has over 12 years of experience in technology and telecommunications consulting in the U.S., Europe and Asia. Dr. Shaw's practice areas include voice and data network optimization and sourcing, cellular technologies, and IT operations outsourcing. He can be reached at jshaw@paceharmon.com.
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