Avoiding telecom bill blues

Take four carriers. Divide their offerings among the numerous departments you’d find in an organization. Subdivide the offerings into 450 invoices. Subtract one carrier. Add another. What’s left? Either a potential telecom billing mess or the communications situation at Memorial University of Newfoundland (MUN), which isn’t the disaster that it could be.

The school’s main campus in St. John’s gets invoices via data feeds from the carriers, so MUN’s not drowning in a sea of paper, and it has a good sense of whether it’s being charged the right amount for service. That’s handy considering Memorial recently dropped one Centrex service provider and added another. The changeover was smooth, but, as with anything, hardly perfect.

“There were some start up problems that had to be reconciled, including billing, and a couple of small issues that exist today,” said school representatives in an e-mail response to Network World Canada’s queries. “However, the vendor and Memorial staff have worked together to keep up with issues.”

The university uses an electronic service request system that ties into carrier networks, so service needs don’t go unanswered. Beyond that, MUN employs job tracking numbers, and it reconciles costs with services every month.

“Telecom management is complicated for us only by the sheer volume of work that is involved in the management of those services for an organization the size of Memorial,” the school reps said. “We feel that we have a very competent telecom support staff, and our processes are very organized for telecom payment and reconciliation.”

According to industry observers, however, many organizations cannot claim to have the same level of control over their telecom costs. Samantha Kane, founding partner of Kane-MacKay & Associates Ltd. in Belleville, Ont., said carriers over-charge by $236 billion each year, and typically bills carry a five to 18 per cent error factor.

The problems result from service changes on the enterprise’s side that are not matched by the telco’s billing department, as well as increasingly complex technology that is difficult to categorize: is IP telephony a datacom expense, or voice?

Then there are internal issues, such as the enterprise’s disinclination to hire highly skilled telecom employees who are savvy in bill management.

“Telecom administration is a back-office function and never gets a lot of visibility,” said Henry Dortmans, an industry consultant at Angus Dortmans Associates in Ajax, Ont. He explained that the telecom department is often trimmed when cost cuts come.

But despite hurdles, companies can get control of their telecom bills, and maybe even save money in the process.

Kane suggested that firms should collect the carrier invoices and the equipment list pertaining to communication services. “Bell Canada has a very detailed equipment recorder. It tells you every single piece that you either rent or have a service with them monthly, by individual line-item.”

By scrutinizing the equipment record, the corporation may discover a few surprises. “There might be a really old piece of equipment that was under special assembly 10 years ago that you could have bought 10 times over,” Kane said.

Service changes are particularly sticky, she said. “It’s so important, when you are upgrading service, to see the order for the replacement, that everything has been out-ordered properly and completely. If it doesn’t happen, you will continue to pay for the old service. I see that every single day.”

Dortmans said it’s important for the enterprise to know which lines go where. Keep detailed records, and assign a point-person to amend those entries when employees come and go, or services change. “You have to assign it to somebody. Who’s going to be ultimately the person or group responsible?”

Kane said it’s also a good idea for companies to undergo the sort of technical audits that her consultancy offers, rather than employing the “paper chasers” that look no further than the invoices. Telecom auditors that only peruse the bills can miss details. “

They go and look at the Bell bill,” Kane said. “They see that there are copper trunks behind the T-1. They think the trunks are redundant, but sometimes they’re not. They’re for failover, so if the T-1 goes down and the switch stays up, those trunks become the service. And if the T-1 is busy they become overflow.”

Dortmans, however, said bill auditors have their place. If the customer wants someone to reconcile invoices with services, simpler audits can do the job. And “typically a review does save more than it costs.”

There are other options too, such as the expense management software that Mississauga, Ont.’s Avotus Corp. offers. Known as the Intelligent Communications Platform (ICM), this technology collects carrier invoices, matches the data with usage and equipment, and automatically returns the bill to sender if the carrier tries to charge more than it should. ICM can cost between $100,000 and $1 million, depending the size of the corporation, the number of locations it has, and whether the customer wants it hosted, managed by Avotus or managed in-house.

According to Alan Gold, Avotus’s senior vice-president of marketing and corporate strategy, carriers get bills wrong because invoicing on the service provider’s side of the equation is complicated.

“It’s just such a complex environment, like sending an eight-year-old out to do an inventory of a grocery store. You’re just not going to get an accurate count.”

Still, Kane said carriers are getting better. Witness the massive project that Bell has undertaken to consolidate its 200-odd billing systems.

“They have so many processes to get an order in that details fall through the cracks. It’s not done intentionally, however, they are not going to go back and look. That’s the customer’s job.”

Memorial’s reps said the school has no trouble with carrier invoices.

“Many years ago there were instances when the presentation of the phone bill was a bit more difficult to follow. However, we don’t find that to be the case today.”

MUN doesn’t use telecom auditors to keep its bills straight, but it does use a few best practices: electronic data invoicing and payment; inventory reconciliation; electronic service requests, and frequent contact with carriers. It all adds up to an ounce of prevention. “It is easier to maintain a good service than it is to do a major audit of telecom equipment,” the school’s reps said.

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