Deep Dive Eliminates Telephone Overcharges

Deep Dive Eliminates Telephone Overcharges – Creating Savings and Peace of Mind

Most organizations with multiple locations will have many telephone vendors that they must deal with daily. Each Telecom vendor will have different service offerings that will create confusion and ambiguous monthly invoices. How do you keep your organization from overpaying for your services or having the wrong ones in place at each location?

Organizations require telecom services at each location for several reasons:

  • Regulatory – fire alarm and elevator lines
  • Security – alarm lines for the security system
  • Order Management – Point of Sale (POS) over data circuits
  • Customer Access – Direct Lines to departments for customers
  • Connectivity for location to corporate – Data circuits
  • Long distance – Connecting the location to the outside world for long-distance calls
  • Wireless Service – Wireless devices for employees

These services will be provided by multiple vendors, which means that there will be multiple invoices for each location, each month. Identifying the best vendor with the best rates is not the beginning of the quest to eliminate overcharges. The beginning is the deep dive that is required to identify what services are already in place and how those services are used.

Most organizations have specific telephone needs that require circuits and copper lines for each location. Keeping up with the circuit numbers, each copper line phone number, and what it is used for is a cumbersome task. For one retailer, not ensuring that services and equipment were properly cataloged and monitored created an embarrassing situation for the telecom and IT team and overcharges of over $62k paid needlessly by the retailer.

Retailers must have telephone numbers that allow a patron to call a specific department such as men’s shoes or children’s clothing. To have this type of service a retailer needs to have direct lines to each department. Keeping an inventory of the circuits and phone numbers may have identified that the services were not canceled when the location closed. The other issue that created this overcharge situation was the ambiguous invoice from the telephone vendor. The billing did not break down the services with enough detail to allow the telecom and IT team to realize that when they requested the services to be disconnected, not all services were disconnected. This oversight caused a 2 year overpayment period of $62k.

So, beyond the obvious of making sure your company is not overpaying for services, why is this deep dive needed?

In the Telecom industry, this deep dive is referred to as an inventory and audit of the telecom and IT services. This inventory and audit should create a baseline of service types, costs, contracts, and invoices. It should also validate what services you have, the location address, and the department or personnel using the services. Identifying errors, overcharges and inefficiencies in your environment will bring the entire process together to cut costs and increase efficiency. Having this information detailed by location would have saved this retailer over $60k because when the services were no longer needed and a disconnect request was made, it would have been quickly identified that the services continued to bill.

Identifying the right partner to work with to perform the inventory and audit is a must. There are many organizations that will “audit” your telephone invoices, some only charging for a portion of the savings however, defining exactly what will be audited and what the deliverables should be the first questions asked of your potential partner. If you need this deep dive to identify very detailed information about your current telecom environment, you will most likely not receive that with a contingency-based model as often these are quick looks at the services to identify the low-hanging fruit. The deep dive needed to specifically identify all services and their purpose will need to be performed by a project-based company that defines the deliverables with multiple steps and a very detailed work product.

Identifying the information that will be included in the inventory and audit is one of the first steps in gathering the information required and a timeline that will produce cost-saving results. One of the most frequent inventory and audits performed is for copper lines or Plain Old Telephone System (POTS) lines. These lines are often required for businesses for alarm or elevator lines. Several years ago, this was the best and most cost-effective solution, however, innovation has created new types of services that work better and are much more cost-effective. A business can transition over to these new services. However, if you do not have an inventory of all of your current services and phone lines, you run the risk of not disconnecting all of the POTS lines and you will keep paying for them.

A recent inventory and audit identified over 600 POTS phone lines that should have been canceled years before, however, the locations continued to pay for the lines because they had no idea the lines still existed. The services had moved to a more modern service at a much lower cost, but the telecom team performing the work did not realize that the lines continued to bill. This oversight cost this company over $30k per month.

How can your chosen partner prevent this type of oversight from occurring? Identifying all the current services is the best place to start by ensuring that you’re only paying for what you need. A successful project consists of a framework for managing fixed telecom environments that focuses on people, processes, and tools/technology. The inventory and audit establish a contract, invoice, service detail, and cost baseline. The visibility gained through the project supports technology selection, budgeting, contract negotiations, vendor relationships, change management, and other integral telecom activities.

What type of information is needed to complete an inventory and audit?

  • Location address
  • Service contracts
  • Invoices
  • Customer Service Records
  • Organizational information
  • Service ordering process

Identifying the services and lines or circuits is one of the most important areas of the project as this is where most of the hidden services are found. Ensuring that an organization is only paying for the services that they want, and need is an integral part of the process and can uncover thousands in savings. During an inventory and audit for an auto parts after-market organization, it was uncovered that there were 25 toll-free lines billing long-distance calls however the lines did not belong to them. The lines were billed through the long-distance carrier and were on an invoice that was billed monthly; however, the total invoice cost was over $500k monthly and was more than 1,000 pages in length. The only way this type of overcharge is identified is by calling each phone line to ask who the line belongs to. Once this occurred, the lines were moved from the organization’s account, saving them $10k per month.

Verifying ownership of the services is the first part of the process and once the services are verified as belonging to your organization, it is necessary to ensure that the monthly charges are accurate. Identifying where contracts exist for each location is time-consuming but a required part of performing the inventory and audit steps. A quick-service restaurant learned the hard way that obtaining a global contract does not mean that you can set it up and forget about it. For their 280 locations, the Internet Service Provider (ISP) set up services under contract, however, they set up an incorrect rate plan that caused this client to bill at a higher rate for each location’s Internet service. The higher rate cost them $16,000.00 for the year, something that they had not budgeted for, and the overage caused financial reporting issues for their locations.

With the various types of services telephone or landlines, wireless, internet, long distance, etc. the steps to complete the inventory and audit are different for each type of service. Ensuring that your partner is fully versed on each type of service and understanding what steps will be taken to audit each type of service will eliminate issues during the deliverable phase.

Upon completion of the project, you should have a set of these discoveries. It will also give you the baseline of information you need to effectively manage your environment on an ongoing basis, optimizing cost-effectiveness and efficiency. Completion of this project will provide key insights, revealing what services are installed, where services are installed, what services are invoiced, and how much services cost. This project will provide you with the comfort of a complete inventory of your telecom environment and will give you the baseline of information needed to manage your telecom environment in the most efficient and cost-effective manner.

With the skyrocketing costs for telecom services and the need for fiscal responsibility in the face of inflation and possible recession, it is imperative that a business consistently monitors their telecom and IT invoices and services.