Telecommunications Expense Management in the 21^st Century

Managing telecommunications expenses in today’s business environment is complex and confusing. Some history is in order to understand how we got here, what the issues are, and how we can better manage those expenses to recover your hard earned money. It is highly probable that you are paying for telecommunication provider mistakes that you are not aware of and they will not disclose.

The Court mandated divestiture of AT&T from its Bell Operating Companies in 1984 was designed to break up the monopoly and create a more competitive environment and lower prices to consumers.  The Telecommunications Act of 1996 created additional competition by allowing Competitive Local Exchange Carriers (CLEC) and resellers into the market. This brought over a thousand providers into the market.

Competition has lowered prices, and fostered advancements in technology to the benefit of all.        Today we can send data at gigabit rates, communicate wirelessly – voice and data, surf the web from a laptop or cell phone, and retrieve e-mail from a PDA or Blackberry type device. The point is the technology works and works well.

However, 25 years later, with all of the mergers, hostile acquisitions, bankruptcies, corporate scandals, and the addition of literally thousands of providers, we are left with an industry in turmoil. Consumers are left with difficult decisions as to which providers to partner with and whether the relationship will last for any reasonable period of time. In addition, with all of mergers, many of the billing databases have not transitioned seamlessly from one company to the next. Many carriers are required to file tariffs with state PUC’s and or the FCC. These tariffs are programmed into the billing systems and are subject to keying entry errors.  In addition, there are over 10 Million service orders processed each month that are subject to keying entry errors. As a result, 80% of telecommunications bills have errors of some sort. The good news is that 99% of the errors identified and reported are refunded to the customer. The bad news is that only about 2% are identified and reported. It equates to Billions of dollars of our money each year.

As consumers we likely have services being provided by multiple service providers each with a separate invoice. Services such as Local telephone lines, intra-lata Long Distance, inter-lata LD, possibly international LD, private line data, DSL, ISP ( internet service provider), and wireless. These services are essential to the operation of our businesses. Receiving multiple invoices, likely differently formatted, can be a challenge to read and understand much less manage effectively. Many businesses review their bill, compare it to the last one or two, and then pay it. It is likely that there are errors that you are not aware of and are paying too much for your services. It is also likely that excess capacity exists in your network if it has not been carefully managed over time. How many managers have reviewed their overall telecommunications after taking over for the last manager or two or three?

Telecommunications Expense Management (TEM) is a relatively new service; it has grown in acceptance by the business community in the past five years as a result of the complexity in trying to manage the technologies and reduce expenses. If you are not utilizing a TEM service or software it is highly probable that you are spending more than necessary. Reviewing, optimizing and recovering expenses is what TEM is all about.

The economic crisis we are currently experiencing, along with increases in costs for just about everything, makes it a real challenge to balance the books, let alone show a profit. This is one expense that every business owner or manager should review and recover. It is highly probable that with the right TEM service you could recover from 10% - 50% of what you currently spend and plug it right into your Profit & Loss statement as pure cash profit. As an aside, AT&T is now once again the largest provider of telecommunications services in the U.S.  How far have we really come in the past 25 years?

Jerry Chinn Jr is the Owner and President of Chinn & Associates Consulting Inc., specializing in TEM.

A 32 year veteran of the industry, retired in 2007 as a Senior Sales Engineer for Qwest Communications.

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