The City of Toronto’s telephony problems are commonplace, according to professionals working in the industry, and cost-management issues are rampant in both the public and private sector.
A report issued Tuesday from the city’s auditor general revealed years of overpayments
and unnecessary cost associated with land lines, cell phone accounts and Internet service. About 82 land lines had nothing attached to them and the city was paying for 140 unused cell phones, according to an article that appeared in Wednesday’s Toronto Star. Also, the city reportedly overpaid as much as $360,000 for long-distance service in 2002 and 2003 by not taking advantage of cheaper rates.
The auditor’s report may have reflected badly on the City of Toronto, but city staff probably aren’t doing any worse than a lot of organizations, said one consultant.
“None of these things are unusual,” said Ian Angus, principal at Angus TeleManagement Group, based in Kemptville, Ont. “It’s been a phenomenon of the past decade or so. As long distance prices fell, a lot of big organizations decided they didn’t really have to manage their phone bills anymore and a lot of telecom departments were decimated.”
Roger Yang, CEO of Toronto-based Avema Corp., started his business 10 years ago to address this problem. Organizations began to lose control of telephony costs in the 1990s, he said, and the problem has been exacerbated by the proliferation of cell phones and wireless technology.
Avema, which helps organizations identify and telephony cost-management issues, has worked with CN Rail, Purolator, as well as several banks and energy companies. Most IT departments are focused on keeping the network up and running rather than eyeballing account irregularities, he said. He added that responsibility for phones is often scattered across IT, HR and accounting, making it difficult to co-ordinate management efforts.
“It’s not unusual to see these types of things happening in any large organization,” said Yang. “They don’t tend to have to same kinds of controls. Just from Bell Canada alone, you can have hundreds or thousands of bills. To go through all that month after month takes a lot of time.”
Phone management is far down the list for a lot of IT managers, said Ron Roy, manager of IT services for the City of Stratford, Ont.
“It’s one of those issues where it’s ‘Oh yeah, we’ll get around to it.’ But with the constraints and difficulties of everyday operating requirements . . . usually the last thing you look at is telephone service,” he said.
Organizations can choose to outsource these issues to consulting companies or handle them internally by adding dedicated staff, but they have to be addressed, said Angus. “In any large organization, the person in charge of the phones is scrambling to put out fires all the time.”
Stratford manages most of its telephony internally, said Roy, but has used consultants to perform audits in years past and its provider, Bell Canada, does regular system reviews. He added that it’s easy for most organizations to let their attention stray from basic phone service.
“If the phones are working and there’s a dial tone, you pick it up and you make the calls. (Cost) is the last thing that people think about,” said Roy.
Dennis Schooley, founder of Schooley Mitchell Telecom Consultants, said that telephony management isn’t much different from any other type of IT project within an organization: a needs analysis followed by RFP process to select a vendor, and due diligence in the implementation stage.
“It’s the same thing if you’re acquiring a machine from a manufacturing company or doing an engineering project for a road. . . . I could explain that same process if I was buying a truck,” said Schooley.
Both Schooley and Yang said they could save clients large sums of money just by identifying issues of misuse. People assume cell phone calls are cheap because the cost structures have changed in recent years, said Yang. “I think we could save (Toronto) a million dollars a year, just by managing the usage, let alone negotiating the right contracts and putting them on the right pricing plans.”