Smart strategies to slash mobile telephone costs

With wireless usage exploding, corporate telecom managers are faced with the specter of untold numbers of wireless devices chewing up voice and data services, not to mention creating major risks for corporate security.

The spread of BlackBerries, cell phones, smart phones and iPhones across the enterprise provides significant advantages for businesses that want to use wireless voice, data and SMS to easily maintain contact with employees who are working from home, from remote locations or who are traveling abroad.

But as with any new technology, the widespread adoption of wireless devices will require corporate IT departments to make adjustments in how they manage telecom expense and security issues.

Larry Van Etten, senior manager at Ikon’s telecommunications service center in Buffalo, says his company used to have an ad hoc approach to managing wireless telecom expenses that relied on several carriers and had no centralized management plan.

“When I first got involved at the start of a [telecom expense management] group for Ikon, we did not have a standard contract, we had 300-plus offices doing their own thing, we had a gamut of plans, of minutes, of everything,” he says. “It was really important for us to get control of what we were paying for.”

Get a handle on expenses

The first step of any plan to gain control of expenses says Van Etten, is to understand what wireless telecom services your company actually needs. While this may sound obvious, it’s actually one of the largest challenges facing companies trying to manage their telecom expenses, says Joe Basili, the vice president of research for AOTMP, an organization that provides research, certification programs, skills assessments, advisory services for enterprise telecom expense management.

Many businesses are simply unaware of how many devices and services are being billed to their accounts, he says, because they haven’t come up with a clearly defined policy on what services they will or will not pay for.

“A lot of companies end up with a patchwork system where some expenses are billed directly to the enterprise, while in other cases employees already have devices, and their manager tells them that they can expense it to the company,” he says. “This happens because they haven’t told their employees what the standardization policy is. It’s very difficult to enforce something hasn’t been communicated.”

In order to assess company needs, Basili says, companies need to look at each individual employee’s consumption rate to identify potential areas for savings. For instance, many companies are investing in wireless telecom plans that pool minutes together for individual departments.

Thus, if a particular group of employees doesn’t typically use a lot of minutes, it might make sense to give them a pool of shared minutes to use over the course of a month. Conversely, employees who are heavy talkers might be better fits for flat-rate monthly wireless plans.

Mike Jude, an analyst at Nemertes Research, says once companies figure out their own wireless telecom needs, they need to take time to educate carriers on their needs. Whenever companies start working with new carriers, or whenever they shift more of their services over to a carrier they’re already working with, Jude says carriers can be somewhat confused on how to meet their wireless needs.

“I recently talked to a large insurance company that had been dealing with a large carrier that had been providing them with services for a number of years,” he says. “And once the carrier’s coverage area grew large enough where the company felt it could consolidate down from three carriers to one, the company found that the carrier had to be educated on all the units of the company, on what coverage different departments required and the quality of service needed. Needless to say, the insurance company felt the carrier should have come in more prepared to know what its needs were.”

In addition to analyzing their employees’ usage, Van Etten says, companies should look to consolidate the number of carriers they use. In particular, large companies with geographically diverse locations should take a hard look at where they can “consolidate the number of contracts they have with vendors and to get rid of the mom-and-pop carriers” they have contracts with.

Jim Carroll, the executive vice president for TEM vendor Rivermine, says large companies should ideally look at negotiating telecom contracts with two or three carriers to ensure that all their locations get solid coverage.

“One of the common mistakes we still see a lot of is companies that try to consolidate with one carrier,” he says. “What they leave in their wake is some places where certain carriers don’t provide good coverage.”

Once companies pick two or three carriers to provide wireless services, they’ll need to negotiate contracts that fit their companies’ needs. Carroll says when Rivermine helps its clients negotiate contracts, it first assesses the company’s demand management and usage management for wireless services, looking at factors such as how often employees travel abroad and how often they work on-call after hours.

Assessing overseas travel telecom expenses has become a crucial factor in managing telecom expenses. A recent study by Harris International found that 15% of the U.S. global workforce travels overseas at least once a year and that U.S. enterprises spend up to $693.50 on international cellular roaming charges each time an employee takes a business trip overseas.

Van Etten says one of the most important tactics for negotiating contracts lies in whittling down a lot of the nickel-and-dime charges that can add up to big bucks over a period of months or years. In addition to voice and data services, he notes, companies should also look at how much they’ve been paying for call forwarding, for voice mail, for SMS and roaming charges, which can all add up to major expenses if companies don’t have the right plan to cover them. The goal of the negotiation, he says, should be to get as many of these charges dropped as possible.

“Companies should ask carriers if, as part of the deal, they can make SMS charges go away,” he says. “They’ll come back and say they can’t do it, but that they’ll give you a 300-message pool per month. Using these tactics, we’ve eliminated a lot of the nickel-and-dime charges that were becoming big line-item charges.”

Managing telecom devices

Managing wireless telecom services is only part of the challenge of wireless expense management. Managing wireless devices themselves, it turns out, can be even more important.

“Wireless telecom opens up a whole new world of security issues,” Carroll says. “Folks are walking around with a minicomputer on their belts, people are walking around with sensitive company information on their devices.”

Losing sensitive company data is obviously the biggest risk associated with wireless telecom devices. Basili thinks that it’s such a big risk, in fact, that he says companies should set up a completely separate help desk dedicated to managing wireless devices.

An employee who loses a wireless device can alert the help desk immediately to remotely wipe data off the device. Additionally, the wireless help desk would be instrumental in providing device application support, for installing backup data into new devices and for changing the types of services and applications a device has access to for employees who change jobs within the company.

Thus, for example, the help desk could add minutes or SMS to devices for employees whose new positions require more telecom services.

Of course, managing telecom devices isn’t only necessary for security reasons, but for cost reasons as well. Noel Huelsenbeck, the president of TEM software vendor Vocio, says if companies don’t keep track of what devices they have, they could pay for services that aren’t being used for company purposes.

“There are a lot of moving parts to a wireless telecom system,” he says. “Let’s say that you have someone who’s leaving your company. If their services aren’t terminated quickly, you could be paying for services for employees that are no longer in the company.”

Van Etten, whose company is a Rivermine customer, says keeping track of wireless devices for every employee requires some kind of TEM tool. In order to prevent employees from leaving his company with their wireless services still intact, he pulls up files for current employees while paying bills every month.

If any employee is marked with a red box in the system, he says, then that employee is designated as having left the company. The TEM system then allows them to pay the final bill for that employee’s services and then verify that the employee’s services have been cancelled.

Van Etten says having so many wireless devices to keep track of has made using TEM tools more important than ever, since keeping tabs on all of them would be virtually impossible with standard spreadsheet software.

“Not everybody needs a TEM tool, and small and medium businesses can get away with using Excel or Access,” he says. “But Fortune 500 companies, you absolutely need a TEM tool. Because when they’re dealing with carriers, the biggest thing that companies have to realize is that they should never, ever, ever assume that their bill is correct.”

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