Telecom Expense Management

FUSF Fees – What are they? Do we need to pay them?

By Robert Halik, Veramark Senior Telecom Analyst

One seldom-discussed aspect of Telecom Expense Management is the payment of Federal Universal Service Fund (FUSF) Fees. FUSF fees are levied against service providers by the FCC to promote connectivity in rural areas throughout America, which typically do not have the same type of resources found in urban areas.

According to the FCC, the Universal Service Fund supports four public programs:

• Lifeline/Link-Up: Provides discounts on monthly service and initial telephone installation or activation fees for primary residences to income eligible consumers.
• High-Cost: Supports companies that provide telecommunications services in areas where the costs of providing service are high.
• Schools and Libraries: Helps classrooms and libraries use the vast array of educational resources available through the telecommunications network, including the Internet.
• Rural Health Care: Helps link rural health care providers to urban medical centers so that patients living in rural America will have access to the same advanced diagnostic and other medical services that are enjoyed in urban communities.
 

Fee – The Contribution Factor
The fee contribution factor fluctuates each quarter as mandated by the FCC. Each quarter the Office of Managing Director (OMD) announces the percentage for the FUSF fee. According to the FCC, the fee is determined by the following rationale:

Telecom Expense Management: Are You Asking the Right Questions?

By Robert Halik, Veramark Senior Telecom Analyst

Telecom expense management (TEM) is an ongoing process. Invoice audits & optimization analyses can yield substantial one-time savings, but an ongoing proactive TEM program is necessary to stay ahead of the expense management curve.

Here are twelve questions that top TEM organizations continually ask themselves to make sure their TEM programs are always delivering maximum results:

1. What precisely are our organization’s operational needs?
2. Are we only procuring services we truly need for our company?
3. Are our essential services priced competitively compared to current market rates?
4. Are there cheaper service alternatives that could provide the same level of service?
5. Do we know exactly which of our services are under contracted rates and which are receiving non-discounted or service guide (tariff) base rates?
6. For non-contracted rates: Why have we not negotiated contract pricing with a vendor(s) for these services? Is the added flexibility needed to justify the non-contracted pricing?
7. Without having to take more than a few minutes to obtain the answer, do we know how many contracts we have rolling up to each service provider?
8. Do our contracts make sense as presently structured or could they potentially be renegotiated or consolidated?
9. Do we know precisely when each of our contracts is expiring? A year from now? Two years from now? Three years from now?
10. What will we do upon expiration of our upcoming contracts?  Do we have a plan?
11. We recently acquired XYZ Corp. What is the state of their services in terms of their pricing and contractual situation? How do we fold this into our existing group of services and properly manage until fully integrated?
12. Given our present operational performance needs and assuming we he have the right services today, do we know where the technology is headed so we can properly evaluate our service alternatives down-the-road in one to three years?

Don’t be shortsighted in your approach to Telecom Expense Management. Keep at least one eye on your long-term goals at all times and make sure your team continually strives to proactively manage operational performance and network costs.

LEARN MORE – watch our on-demand webcast “Why Do Some Telecom Expense Management Programs Fail While Others Succeed?”

To VoIP or Not to VoIP?

By Robert Halik, Veramark Senior Telecom Analyst

Voice over Internet Protocol (VoIP) is a technology used to transmit voice conversations via the Internet.  It is an emerging alternative to traditional wired telephone networks, with unique advantages and disadvantages. Let’s take a look at VoIP through the “lens” of telecom expense management – focusing on service requirements and cost – and see what VoIP has to offer for your organization.

VoIP Advantages
One of VoIP’s primary benefits and most attractive qualities is its cost. In most cases, it’s much cheaper than traditional voice phone service because it leverages the power of the internet.  Many service providers are now offering competitively priced VoIP plans with fixed fees for unlimited domestic and – in some cases – all North American calls. Most providers are also offering overseas service at very low rates.

Another attractive quality of VoIP is its flexibility. You can send data in the form of attachments or pictures while simultaneously talking on the phone. Try doing that on a traditional phone line! Moreover, VoIP’s technological flexibility allows it to provide many features that users love, such as three-way calling, call waiting, call forwarding, voicemail, and caller ID.

The third big advantage of VoIP is portability. You can essentially tap into the internet anywhere in the world and communicate with your business associates at very low rates.

Are we in love with VoIP yet? Like all beautiful things in life, blemishes may appear as the camera draws nearer! So let’s take a close look at the potential downside.

VoIP Disadvantages
The packet switched technology on which VoIP is based can sometimes cause problems due to network technical issues or traffic overcrowding. For example, your service might be interrupted if there is a power outage.

A more common problem is degradation and/or reliability of the connection. Packet switching technologies such as VoIP cut data into small snippets to be forwarded and reassembled at their destination location. While this helps bypass traffic congestion, a conversation may occasionally be interrupted by spurts of silence due to transmission difficulties. Usually, this is more of a minor irritation rather than a major problem, but it will happen from time to time.

Is VoIP for you?
The answer depends on the nature of your business. If you run any type of emergency service where interruption of service of any kind needs to be avoided at all costs, then VoIP is definitely not for you – there’s simply too much on the line. VoIP has come a long way but it still has service reliability blemishes.

If, on the other hand, your business can tolerate some level of minor network interruption, then you should consider VoIP because of its flexibility and competitive pricing. And whatever technology you choose, make sure you have a comprehensive telecom expense management strategy in place to control and contain all of your telecom costs while still ensuring strong operational performance.

LEARN MORE: Watch our on-demand Webcast “Balancing Telecom Expense Reduction with Corporate Demand”

The Many Roads to Telecom Expense Management

By Rob Tyler, Sr. Marketing Technical Writer

Who needs telecom expense management (TEM), and why? The reasons are as diverse as the types of organizations that invest in TEM. Sometimes it’s the end result of a company testing the waters with an audit or other professional service.

In other cases, the TEM solution evolves gradually – from call accounting, for example - to bring more spend under management. Or it’s a strategic response to a sudden, business-critical need. Let’s look at two case studies that illustrate these scenarios.

Organic Evolution
A major non-profit health insurance company had been using call accounting software for years to track telephone usage by its client support representatives. But carrier invoices were still being processed manually, which was labor intensive and prone to errors. The company decided to expand its call accounting solution with invoice loading, processing, and management.

Now invoices are received in electronic form and loaded directly into the TEM system. They enter a process workflow that enforces best practices and streamlines validation and approval.

According to the customer, the new system “has made it easier to charge back services.” And it automatically alerts staff members to billing variances, such as new services, charges above or below threshold, and 3rd party billing, saving them time and money.

Mother of Invention
The deployment of TEM is sometimes a matter of necessity, as in the case of a prominent east-coast med school. Until recently, the university had been owned and managed by the state, which billed each separate area of operation for their telecom charges every month. When the university recently assumed ownership of the telephone system, they had to deal with carriers directly for the first time.

The university installed a TEM system to collect and consolidate telecom expenses and charge them back to departments. They use the system to track and manage inventory and MACD on a daily basis. Monthly bills are emailed to department managers, who can link directly to billing details to review their charges and identify unnecessary lines that can be disconnected to reduce their annual telephone budget.

The university’s previous chargeback process was very time-consuming and tedious. According to the customer, “What used to take hours or days now takes minutes.”

Solutions that Fit
TEM can save you time and money, too, but look for a provider who can design a solution to fit your business needs. TEM solutions are as diverse as the organizations that deploy them…and the reasons for doing so. It’s your business, after all. Would you want it any other way?

LEARN MORE – download our white paper “The Low Risk Approach to TEM”.

Telecom Expense Auditing – Use Prioritization to Drive Savings

 
By Robert Halik, Veramark Senior Telecom Analyst

The messy truth of telecom expense management (TEM) is that it can be a dark, cold, and unforgiving place, especially for those harboring unrealistic expectations about the complex task of controlling an organization’s TEM spend. But prioritization can help you see the light!

When conducting any type of telecom audit, it is imperative to make prioritization a primary focus. This may seem obvious, but you’d be surprised at how many organizations forget the proverbial “forest for the trees” adage. Don’t get so fixated on nailing down every little detail that you forget the importance of the big picture mantra of TEM: drive visibility, savings, and efficiency.

Decide What’s Important
First things first – before you can determine what needs the most attention, you must be able to clearly delineate the distribution of spend by vendor and services.  Once you clearly understand what vendors you buy from and the services they bill you for, you can organize the data in a meaningful way, by importance and urgency. For example:

Determine Your Priorities
Now that you can clearly see where most of your telecom budget goes, you can determine your audit priorities. Vendors with larger aggregated spends are naturally to be considered important; vendors who bill certain services at excessive prices may warrant urgent attention for those specific services.  Such services are deemed urgent because it makes sense to scrutinize them sooner rather than later in order to reduce expenses as quickly as possible.

Leverage Your Resources
You have a finite number of TEM personnel and what seems like an infinite number of telecom challenges. If you haven’t hired a TEM firm for additional help, make sure you can answer the following questions:

• Do I have all of the contracts that drive pricing for invoiced services?
• For non-contracted services, do I have the tariffs and/or vendor service guides that are dictating the costs?
• Who are the customer support contacts for our critical vendors?

Drive Savings & Efficiencies
With a strong sense of your audit priorities, critical resources can be deployed intelligently to audit those vendors costing your organization the most. Or, resources can be deployed to investigate specific expensive services from a particular vendor.

Such a focused approach will drive greater savings and efficiencies because your organization – no matter how good it is – does not have enough time in the day to do everything. This is especially true for TEM, given the myriad competing interests and complexities that define the process.

LEARN MORE – Watch our on-demand Webcast “Why Do Some TEM Programs Fail While Others Succeed?

Choosing a Wireless Device Management Strategy

Wireless device management plays an important role
in overall telecom expense management strategy for most organizations. Enterprises may institute employee liable (EL) or corporate liable (CL) wireless programs. Either approach offers risks and benefits.

EL strategies allow the enterprise to leverage the
mobile devices and services owned by employees, without assuming liability for the service contracts. However, EL strategies also present risks to the enterprise, including:

• Potential exposure of sensitive information. According to Aberdeen, 91% of organizations allowing EL devices permit enterprise email – and all the corporate and customer data that may include – on those devices.
• Poor alignment of capabilities with business requirements. Employees choose devices and plans based on their personal needs and preferences, which may not meet the demands of the
  mobile enterprise.
• Limited control over access and usage. The enterprise has the right to impose mandatory security policies – such as data encryption and password logon – on corporate assets. It is more difficult to formulate and enforce policies on customer-owned devices. 

CL strategies reduce these risks, but introduce others. First and foremost, the enterprise is liable for the cost of devices and service plans. In addition, Federal Regulations require the enterprise to tax the employee’s personal use of the device as a “fringe benefit,” or to monitor compliance with the enterprise policy prohibiting such use.

Many organizations use a combination of EL and CL strategies, based on business needs and responsibilities of mobile device users. Both EL and CL approaches require management and policy solutions to manage cost, usage, and enterprise security. Your TEM provider can help you design a wireless device management strategy that meets your needs.

LEARN MORE – watch our on-demand Webcast “Wireless Trends, Influential Policies, and Rules of Engagement”.

How to Find Hidden Savings in Your Telecom Budget

So you suspect that there are potential savings lurking deep within your company’s telecom budget. You’re probably right, but do you know where to look? Here are four methodical steps you can take to locate and realize potential savings.

Inventory
Accurate telecom inventories are the building blocks of telecom expense management. Most businesses have partial telecom inventories but few have complete records. It’s a three-step process:

1. Gather complete data for each contract: vendor, start/end dates, commitments, rate review dates, key terms and conditions.
2. Determine your existing service requirements for long distance, local, wireline, wireless, data plans, etc. Try breaking it down by location and service type – you may find that you have higher volumes in some areas that qualify you for better rates.
3. Get an inventory of all your telecom hardware that shows the vendor, contract number, lease/purchase, model/serial numbers, location/user, and maintenance options for each piece of gear. When we do this for clients, we often find that maintenance contracts are still being paid for equipment that is no longer in use.

Audit
Now that you know exactly what you have, perform a baseline audit. Make sure that the charges on your telecom invoices are accurate – check your rates and discounts, look for disconnected services and closed sites.  Watch out for third party charges for services you didn’t order and don’t need. Going forward, consider auditing your invoices on a monthly basis, looking at trending, new or different charges, and unallocated expenses. Also, consider a vendor audit to review how contracts are applied across multiple invoices.

Optimize
Now that your inventory is accurate and you have a good baseline audit – optimize. Make sure you have the right number of lines and trunks for your local service needs; you might find savings by eliminating excess capacity. Make sure your access networks are correctly sized and that all your communications ports are being properly utilized.  Examine wireless usage profiles and data/text plans, and make sure your “power” users are not going over their monthly limits.

Negotiate
Now that you know exactly what you have and what you need, you’re in a strong negotiating position when your contract is up for renewal. Don’t accept a generic price quote that fails to address your specific requirements. Consider increasing your contract length in exchange for better rates. You may be able to save money by modifying your terms and conditions. Contract negotiation offers the single biggest opportunity to reduce your company’s future telecom costs.

LEARN MORE
Read our white paper, “The Low Risk Approach to Telecom Expense Management”.

Four Reasons to Explore SIP Trunking

Are your business telecom services delivered by thick bundles of multi-colored wires? If that’s the case, your telecom delivery system employs a Time Division Multiplexing (TDM) trunk. Many businesses are investigating a newer telecom technology, a Session Initiated Protocol (SIP) trunk.  SIP trunking enables youto replace most of that complicated wiring with a vastly simplified setup that improves your internal and external communications.

There are four main reasons to consider SIP trunking:

Maximize Existing Bandwidth
It seems like you can never have too much bandwidth, especially for complex business applications such as video conferencing. A SIP trunk applies call signaling and control features to VoIP setups and delivers multiple services over the same T1 line. With voice, video and data communications all coming through the same pipeline, SIP will give you more bang for your bandwidth buck – and you can dynamically adjust the flow to fully utilize your existing bandwidth.

Ease of Expansion
With TDM trunking, expanding your business usually calls for new telecom hardware. With SIP trunking, you simply upgrade your bandwidth subscription through a web interface or phone call. You can be ready to go in as little as 24 hours – no more waiting while new hardware is ordered, delivered, and installed. A SIP trunk also simplifies the task of expanding your network to include small remote offices and home workers.

Lower Operating Costs
SIP trunking encourages non-traditional carriers to compete for your telecom services. In addition to the large telecommunications companies who own the infrastructure, smaller carriers who want to expand their coverage will be very interested in your business. It gives them a way to leverage SIP services they already provide. You can pick and choose from a wide range of options to get the best deal.

Improved System Availability
SIP trunking also facilitates system redundancy and smooth failover. If one soft switch becomes unavailable, you can choose from a list of alternative soft switches out in the cloud. In other words, you’re not out of luck if the telephone pole goes down outside your office. SIP application servers are built to enterprise class technology standards, and most have convenient web interfaces for ease of use.

No new technology is without risk – we explored some of the risks of SIP trunking in an earlier blog post. But if bandwidth utilization, ease of expansion, lower operating costs, and system availability are high on your list of priorities, SIP trunking is worth a close look.

LEARN MORE
Watch our on-demand Webinar “SIP Trunking: Real-world Lessons Learned”.

How Important is Software as Part of a TEM Solution?

Software is a fundamental building block of any telecom expense management (TEM) solution. Whether you’re considering a premise-based installation, a SaaS solution, or a full BPO contract, the success of your TEM initiative will depend heavily on the software tools that are utilized. So regardless of the type of solution you’re considering, make sure that the tools have the flexibility to accommodate your present and future business requirements, and that your vendor can customize workflows to meet them.

Details In = Details Out
Make sure the software offers the ability to truly allocate costs at the level you require. Can it handle complex GL coding? Does it have the ability to map from the invoice details to the output required for your reporting and AP feed? Off-the-shelf solutions may not meet these requirements. The key is to have this kind of functionality proven to you beforehand.

If you’re considering a SaaS or BPO solution, our advice is to really test the level of invoice detail that your vendor can read into the application. The ability to read call detail records (CDRs) should be an absolute given. Beyond that, data such as network USOCs, service descriptions, circuit identifiers, and location information – as well as wireless plans, features, and usage levels – are all critical data points. Without visibility into these invoice details, it will be difficult to realize the full savings potential that a TEM initiative offers.

Flexible Process Workflow Development
Workflow support is another area of concern. We often work with companies that have implemented an off-the-shelf solution, only to find that the embedded workflows are not flexible enough to handle their process requirements. The vendor may be able to customize the workflows to meet their need, but time and cost requirements are prohibitive. Sometimes it’s an issue of a basic solution being oversold, other times it’s a question of the company not fully understanding their own business requirements. Our advice is 1) know your requirements and 2) be absolutely sure the software can meet them before you choose a solution.

And while the software is crucial, don’t overlook the experience of your TEM vendor. Especially if you are implementing a SaaS or BPO solution, look closely at the people who support the application. Test their response time¬ and process experience. Ask for references and get some unbiased feedback about their level of expertise and technological fluency.

LEARN MORE
Watch our on-demand Webcast: “Why Do Some TEM Programs Fail While Others Succeed?

Wireless Telecom Audits That Produce Material Results

By Arjana Lilic, Audit Manager for TEM Services

You can utilize a variety of recurring audits to help understand and control your wireless telecom spend. Here are six types of audits that we recommend and the material results you can expect from each:

Zero Usage Analysis
Zero usage analysis of voice, data, and texting will determine which devices are not being used at all. You can cancel these devices or put them on a suspension plan if your provider offers one. For example, you might have devices that are used seasonally, or others that are used only for international travel. Put these devices in suspension if possible. If cancelling the devices –  first check to see if early termination fees apply.

Voice Optimization / Buffer Analysis
A voice optimization audit analyzes the amount of voice usage on your active devices, usually over a three-month period. Based on that analysis you or your consultant can determine which voice plan best matches each device. Buffer analysis determines your actual buffer size. Many companies add 10% to 15% of buffer space to make sure they don't incur overage charges.

Data and Texting Optimization
This audit reviews the number of texts and the amount of data sent each month, and helps you decide which plan is best for each device.

Contracts
This audit verifies that you are getting all of the credits and discounts specified in your contract. Errors can be disputed if they are within the contractual statute of limitations.

Non-Business Features
In audits we conduct for our customers, we often find employees who have downloaded ringtones and services such as horoscope alerts. They often don’t realize that these downloads may result in a monthly recurring charge. Some features may be legitimate, such as “tele-nav” navigation for travelling executives. An audit will show you what you need to review.

Benchmarking
Benchmarking involves taking a look at your current spend, rates, and discounts, and comparing them to published rates for similar-size businesses. The telecom market is constantly evolving, so if your last benchmarking exercise was more than a year ago, you should take a fresh look.

LEARN MORE
For more information on this topic, view our on-demand Webinar, “Wireless Expenses: Trends, Influential Policies, & Rules of Engagement."