Peer to Peer Magazine

March 2011

The quarterly publication of the International Legal Technology Association

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BEST PRACTICES T Taming Telecom Costs he cost of an organization’s telecommunications services (voice, data and wireless) typically accounts for three to six percent of their overhead, and can average more than two percent of total revenue. This is a significant expense, regardless of an organization’s size. Consider, too, that according to recent industry studies, nearly 12 percent of invoices from telecommunications vendors contain billing errors. This amounts to significant expenses being paid to telecom vendors. Organizations can avoid paying for these billing errors and reduce their overall telecom costs by following the same telecom expense management (TEM) best practices that TEM providers incorporate into their own solutions and services. HOW TEM REDUCES TELECOM COSTS Telecom expense management solutions address the order-to-payment life cycle of managing telecom assets and associated expenses. TEM helps companies reduce their overall telecom costs by: • Eliminating vendor overbillings • Managing telecom contracts and compliance • Identifying and removing unused or unneeded telecom services or assets • Automating the resource-intensive telecom invoice management process • Creating visibility and accountability across departments for the telecom resources they consume TEM BEST PRACTICES These TEM best practices are applicable to any organization interested in managing its telecom environment. Some points to consider: Create Buy-In and Align Resources: Identify which groups are most affected in managing telecom assets, services and their related costs. While most assume IT/telecom will be the 10 www.iltanet.org Peer to Peer • Telecom contract negotiations can often yield the greatest and most immediate savings primary constituents, it’s also important to align accounting, finance, legal and HR. They participate in the payment and reporting of telecom costs, maintain employee data and perform compliance reporting. An executive-level sponsor is a valuable asset to ensure institutional support. Perform a Baseline Telecom Audit: A baseline telecom audit is the best method to identify and document all telecom assets, billing services, usage patterns, vendors, contracts, service level agreements (SLAs), business priority, critical dependencies, and which person or business unit owns each expense. A baseline audit will also provide immediate cost savings by identifying: • Billing errors • Service optimization opportunities • Cost avoidance opportunities • Reduced pricing opportunities This process establishes a cost baseline for measuring future savings and ROI. Additionally, savings from the audit can be used to fund the TEM project. Centralize the Management of the Telecom Environment: Establish a TEM solution as the single organizational repository for all telecom resources and costs. This centralization improves an organization’s ability to make decisions regarding their voice, data and wireless environments –– including inventory and contracts. This centralized view provides easy access to telecom assets, services and related costs for the variety of telecom users. Evaluate Your Telecom Contracts: Review existing contracts and compare them to the telecom environment documented during the baseline audit. Renegotiate any contract details that aren’t aligned with your TEM environment or where the audit identified improved pricing opportunities.

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