Getting the 411 on Telecom Costs

Products and services that can help your company rein in a major (and often hidden) expense.
Scott LeibsFebruary 1, 2001

CFOs, telecom managers, and others forced to confront the nightmare of corporate phone bills can be forgiven for believing that the number of cell phones is rivaled only by the number of rate plans. Even before cell phones came along, telecom costs were a big-ticket item: so big, in fact, that dozens of specialized auditing firms made a nice living by wading through a company’s phone bills, looking for ways to save a client money.

Now, with cell phones and wireless communication booming, telecom threatens to become a budget-buster. “In some firms, it can be second only to payroll,” claims Paul Reidy, CEO of Traq-wireless, in Austin, Texas. Other estimates put telecom among a company’s three or four leading expenses.

As his company’s name implies, Reidy has a vested interest in the wireless world. His firm provides a Web-based management system to companies anxious to control wireless costs. Using Traq’s service, companies feed their cell phone bills into a software engine that will study usage patterns, analyze different rate plans, and make recommendations for changes that can save the companies money. Sometimes those recommendations entail switching from one carrier to another, but not always. “Often employees sign up for the wrong plan,” says Reidy. “They don’t know their own usage patterns, and, frankly, if they know they’re going to be reimbursed by their company anyway, they don’t have a lot of incentive to shop wisely.”

Drive Business Strategy and Growth

Drive Business Strategy and Growth

Learn how NetSuite Financial Management allows you to quickly and easily model what-if scenarios and generate reports.

Traq will also look for other ways to save money. For example, many employees burn up precious minutes by dialing into their voice mail accounts only to find that they have no new messages. Traq can provide software that will alert users when a new message comes in. One client was paying a premium so that it could have free long-distance as part of its service, but Traq found that employees were using their calling cards to place long-distance calls, thus wasting the premium. “We look across a company’s total usage and uncover things that clients miss,” says Reidy.

Traq limits its service to wireless costs, but another firm, QuantumShift, based in Novato, California, addresses the entire telecom expense, again through a Web-based management system. Deborah Mings, CFO of Nelson Staffing Solutions, a professional services firm in Sonoma, California, says she uses QuantumShift because “I simply don’t have good information on spending.”

Even as independent vendors hawk their wares, however, the carriers themselves are beginning to offer corporate customers better management tools. AT&T, for example, has begun to provide clients such as Mings with usage information on CD-ROM. “It may backfire on them,” she laughs. “I may be so shocked by what I see that I demand lower rates.”

In fact, one selling point for Traq, QuantumShift, and others is the ability to generate enough detail about usage so that corporate clients can negotiate better rates. Carriers have long been open to haggling, and as they work harder to serve corporate customers, there is plenty of room to maneuver. “We’re perceived as a consumer-oriented company,” admits Shane Johnston, a marketing manager at Sprint PCS, “but we’re working hard to meet the needs of business.” Price per minute is dropping, and distinctions between night and day calling, and between voice and data transmission, are being abandoned. With wireless communications expected to account for 30 to 50 percent of a company’s telecom budget by 2010, getting a grip on costs now is essential.