Unchecked Expense

Factor in scores of vendors in the many different locations serving those communication needs, as well as the recent merger and acquisition activity among major telecom players, and the potential for billing faux pas runs high. It’s no wonder businesses have trouble keeping their telecom bills in check: According to the Aberdeen Group, the typical Fortune 500 company receives 15,000 telecom invoices annually, and some 70 percent of all IT managers don’t have accurate inventories of their telecom equipment or wireless plans.

“What we are seeing is a misapplication of billing principles and practices at the carrier level,” says Steve Creason, an assistant professor at Metropolitan State University and a former consultant in the telecommunications practice at Accenture, a management consulting and technology services company in Minneapolis. “The reason I think much of it happens is not nefarious, but rather due to the complexity of the wireless and wired-line billing process.” It can be difficult for users of mobile devices like cell phones, which are based on permitted usage rates, to track their minutes, and in other cases, bills sent to customers from large carriers might reflect what the carrier is being charged for services rendered to customers by third-party providers. “When a Qwest or Comcast sends a company a bill, it might be the result of several different billing organizations,” Creason says.

Singh’s company was recently hired to do a perfunctory billing audit for a large, Twin Cities–based company with about 10,000 locations. Three months later, her company had unearthed close to $1 million dollars in billing errors. “These were problems flying under the radar, like lines that the comp-any was being billed for that were no longer in use, or locations that had been shut down and were still being billed for telecom services,” Singh says.

A local telecom expense management consultant who wishes to remain anonymous offers another example that he says isn’t an anomaly. A California company hired him to help negotiate a new cell phone con-tract for the purchase of 5,000 phones. The advertised price of the phones was $99, but the consultant was able to negotiate a volume price of 99 cents per phone. But when the bill arrived, the organization had been charged $99 for each phone by the cell phone company. “So we had to manually go in and review all of the billing, then have the appropriate credit placed on the bills so it was allocated properly,” he says.

While the perception is that most telecom expense savings come from ferreting out errors on bills, the reality is that even bigger savings can be realized through more rigorous management of telecom use. Some of the biggest opportunities lie in standardizing contract management across the organization, improving telecom inventory management, and employing technologies that can help employees better track wireless use.