UK Businesses Losing more than £1 Billion in Telecoms Black Hole

Aurora Kendrick James has been working for more than 10 years with UK businesses managing their telecoms costs. Based on this experience, the minimum saving achieved is rarely less than 10 percent with some firms hitting waste levels of 38 percent. According to the Yankee Group, enterprise telecoms spend in the UK was £5 billion in 2006, which means that by simply taking control of communications with a formal telecommunications expense management policy Aurora Kendrick James estimates that UK businesses can deliver more than £1 billion back on the bottom line.

With so many telecoms services on offer from fixed line traditional telephony, to mobile, VoIP and WiFi comms, the reality is that businesses are not paying specific attention to the telecoms services they are buying versus the actual services they need. Instead, the trend is for businesses to rely on suppliers to manage their costs and ensure they get the best rates. Given that rate reductions will mean smaller margins for the supplier it is clear to see why businesses do not get the best deal and end up giving money away unnecessarily.

So how can businesses take control and not rely on their suppliers to cut costs? Businesses must clearly define the usage, procurement and management in a formal telecoms policy as the first step to regaining control of spiralling costs. These are the 5 top tips from Aurora Kendrick James for implementing an effective telecoms expense management (TEM) policy:

1. Check your Invoices – regularly validate supplier charges against contracted rates, especially when you have ordered new services
2. Manage your Usage – create sensible guidelines for how employees should use their phones and proactively monitor all usage
3. Supplier and Contract Management – maintain an accurate log of all telecoms contracts and negotiate regular benchmarking and price review clauses to allow you to take advantage of market price changes
4. Inventory and Estate Management – create and manage an accurate inventory of your telecoms estate to allow you to easily spot opportunities to rationalise unwanted services and standardise services and equipment
5. Telecoms Expense Management Reporting – generate and distribute accurate and informative management information to users and managers and constantly reinforce usage policies

Adopting a formal approach and focus to telecoms usage is the key to managing it and the associated costs. Most users are unaware of their telecoms costs and usage and so have little accountability for it. It’s a little like providing an employee with an expenses credit and then not asking them to justify the usage on it.

“Implementing a telecoms policy will educate users. The majority of people will stick to guidelines if they are sensible and well explained; however this process must be continuous and not ad hoc. Providing users with their mobile usage statement and reinforcing the policy on usage can drive out most significant misuse and excess costs,” says Matt Atkinson, managing director, Aurora Kendrick James. “A lack of insight into costs in your organisation will almost certainly mean that you are overpaying for telecoms services and missing out on significant cost savings that could be achieved without changing your suppliers. Once you have established a greater control of these costs your organisation will be able to go on to tackle areas like redundant services, call abuse and fraud.”