Travelex Currency Services Inc. has been in the foreign exchange business for years helping travelers across the globe. In the past, while the company could help vacationers exchange currency, it couldn’t quite get a handle on its own telecom costs.
With over 670 branches around the world, Travelex also has a commercial foreign exchange business that serves 18,000 customers and has one of the world’s largest banknote outsourcing businesses. Each of its locations has associated telecom costs, whether for voice or DSL lines and services.
“We’ve been in growth mode for a considerable time. If we weren’t managing our telecom costs the way we are now, it could have been anywhere from US$3 million to US$4 million a year,” said Norrie Davidson, CIO Americas for Travelex.
Davidson was in Toronto for the Telemanagement Live conference last month.
She shared tips on how Travelex reduced its annual telecom costs from US$4 million to US$2million.
The costs included those for land lines, long distance, switches and maintenance, as well as for cellular and Blackberry devices. Davidson said Travelex gets about 2,000 telecom invoices a month.
Her first savings tip is to hire a telecom analyst whose sole job is to analyze all telecom costs on a continual basis. “Pay them well, they are worth it,” Davidson advised. She also cautioned not to let organizations rely too much on their accounts payable department to analyze the telecom bills, as the responsibility of accounts payable is just to make sure the invoices are paid in a timely fashion. If a company so desires they could also outsource these tasks to a billing management firm.
Companies should also do an annual audit of all telecom suppliers, invoices and contracts.
Michael Dunne, senior consultant with Oakville, Ont.-based Angus Dortmans Associates Inc., said companies doing an audit should expect about a 10 to 30 per cent recovery in telecom costs.
“A thorough audit saves more than only costs,” said Dunne, who also offered his insights into telecom management at the conference. He added that the first objective of an audit is to identify errors and not to look for areas of overspending.
Dunne also advised companies to work with their suppliers to help investigate errors and keep accurate records of all contracts. As well, he added, the accounting department should be aware of audit findings.
“There’s no point in going through this whole exercise, figuring out what went wrong, then not taking steps in cooperating with the accounting and financing people to avoid that happening again,” said Dunne.
Another area where companies can lower telecom costs is multi-vendor consolidation for wireless carriers. Dunne suggests companies should have a minimum of two wireless carriers to ensure adequate coverage.
And both Dunne and Davidson said companies should opt to have electronic billing and establish policies for cellphone and Blackberry use.