VideoIn one of the more memorable episodes of the "Brady Bunch" — and really, how often do we get to use that opening? — parents Mike and Carol are shocked when they see how big their monthly phone bill is getting. The solution? They install a pay phone in the family room, forcing the kids to deposit a dime when they place a call to classmates, coaches, and Child Services.
Harsh, yes, but a few corporate controllers might vote for a similar approach. The fact is, business spending on telephone services — and specifically, business spending on wireless telephone services — is mounting dramatically. According to industry-analyst firm Yankee Group, U.S. businesses now spend a quarter of their telecommunications budgets on wireless offerings. All told, that works out to about $33 billion.
Granted, this hefty phone bill is due in large measure to the ever-increasing corporate reliance on wireless devices. These days, you'd be hard-pressed to find an executive or salesperson who doesn't carry a company-provided cell phone or BlackBerry. In fact, many CEOs seem to think that sky-high cell phone bills mean sales staff are diligently calling prospective customers.
They could be calling Movie Phone for all anybody knows — few companies analyze the wireless spending habits of their employees. In fact, Yankee Group reckons that barely half the large businesses in the United States manage their cellular accounts centrally. For the rest, bills are usually handled by a welter of departments, functions, and business units. Moreover, employees typically lump in their bills with the rest of their monthly expenses.
That's a big blind spot, one that has some companies paying way too much for their wireless service. Take Getronics, an information and communication technology specialist with about 22,000 employees worldwide. More than 2,200 of the company's North American sales personnel have cellular phones.
Until two years ago, the company's management couldn't get a handle on what it was paying for those phones. "It was very difficult, if not impossible, to obtain correct management information on our mobile telephony," recalls Romolo Pallini, Getronics's director of networks, Internet technologies, and telecom. "Some of the bills were paid centrally. Some employees put in expense reports each month. It was a total mess."
In the Roaming
Faced with similar problems, some companies have demanded that their wireless vendors provide audits of cell phone usage. That way, controllers can see which workers are running up unusually big tabs. The usual suspects: employees who rack up big roaming charges or exceed their plan minutes.
But experts note that companies often use several cellular carriers, leaving finance managers to deal with a fistful of lengthy audits each month. Desperate for a less-cluttered view of cell phone spending, some business managers are turning to phone-audit software. The programs, which aggregate calling data and analyze cellular trends, are available from a number of vendors, including Traq-wireless, based in Austin, Tex.; Framingham, Mass.-based AnchorPoint; MSS Group, based in Denver; and TelSoft Solutions, in Glendale, Calif.
The audit software, among other things, examines the call-detail records for all wireless phones and predicts future usage — including roaming and long-distance charges. Brick Thompson, interim CEO of MSS Group, claims the company's customers typically save about 22 percent on their cellular costs using MSS's audit software.
Vendor hype? Not necessarily. Industry experts point out that, with wireless-number portability, it's now much easier for business users to change cell providers. The providers know it, too. Keen to hold on to existing customers, they're more willing than ever to renegotiate terms, even midcontract. "The carriers have to spend $400 to $450 for each new customer," explains Charles Mahla, a senior economist with research firm Econ One, based in Los Angeles. "They'll do all sorts of things to keep you once they have you."
Pallini, for example, performed an audit of Getronics's wireless spending using Traq-wireless's software program. He found that the company was spending 22 cents to 25 cents per minute, mostly because employees were exceeding their plan minutes. Pallini took the data and used it to wrangle better rates from the company's many carriers. He also began adjusting the calling plans of nearly every cell phone user in the company. Now, Getronics's per-minute spend on wireless service hovers between 12 cents and 15 cents per minute — about half of what the company was previously paying.
Big Savings Evenings and Weekends
Given those sorts of savings, experts believe cell phone audits will become fairly commonplace in the next few years. They also believe many businesses will consolidate the management of their wireless programs, tapping a single department to oversee procurement and payment.
Such a move makes sense. "What you don't want is employees going down to the mall and signing up for service on their own or submitting expense reports each month," asserts John Dretler, AnchorPoint's senior vice president. "Then you've got everyone on different plans — there's no consolidated buying and there's no chance for management to review costs monthly."
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