Successful sports teams emphasize fundamentals; if they are neglected, the chance for success is minimal.
The same is true when it comes to ensuring that you're not paying too much for telecommunications services.
In my 13 years as a cost control analyst and network engineer for several banking institutions, I've devised my own list of fundamentals for managing telecom expenses that could help you keep carriers in check.
1. Audit local invoices.
The need to audit your local invoices cannot be emphasized enough. Immediately after making a service change, you should make sure it is reflected correctly on your bill. Additionally, it's wise to conduct a full audit at least every six months. Specific items to look for are:
Billing for unused or previously disconnected business lines, trunks, Off-Premises Extension (OPS) lines and other services. Local exchange carriers (LEC) are famous for billing for circuits long after they've been disconnected.
Casual billing. For every site, you choose a primary interexchange carrier (PIC), which is the carrier you want to carry long-distance calls. But if your interexchange carrier (IXC) doesn't know you've chosen it as your PIC, the IXC may impose a "casual billing" surcharge of 70 cents to $1.30 on each call. Generally, IXC billing on LEC invoices ranges from 9 cents to 30 cents per minute. If you see long-distance calls on LEC invoices that appear much higher than that, you may be the victim of casual billing. To fix the problem, make certain the LEC and IXC know which is the proper PIC. Also ensure that billing occurs on the correct invoice, which is typically the IXC invoice.
Partial charges. Each line and trunk has several rate elements, such as charges for the trunk, access, touch tone and hearing impaired service. In examining an invoice, you may find some portions of a trunk have been disconnected, but not others. For example, the invoice may show 20 trunk charges at $80 per trunk and only 16 access charges. In this case, you may be being billed for four more trunks than you have.
Charges for psychic hotlines, sports lines and the like. Incredible as it may seem, it's not uncommon for an employee to sign up for expensive calling services and list his work phone number, in which case his employer gets the bill. Charges for these services may range from $1 to $40 per month with an outrageous cost per minute. Keep an eye out for such charges, and make it clear to employees that they should only give out their business telephone number for business- related matters.
2. Watch for unnecessary switched access services.
In most instances, switched access services should not exist at locations where you have inbound or outbound dedicated T-1 access. Instead, configure the switched services to ride the dedicated T-1 lines as much as possible. Usage charges generally are 30% to 50% less with dedicated access.
3. Check for phantom long-distance charges.
When Company A disconnects a local line, the IXC and the LEC must be notified. If only the LEC is notified, the number will remain in the long-distance carrier's database as belonging to Company A. When the number is reassigned, its new owner will be charged for the local portion, and Company A will still be billed for the long-distance charges. Make a point to check your bill for such phantom charges.
4. Be prepared to push for a deal.
Competition for your long-distance dollar is fierce. The carriers want your money, and many of them will make some incredible deals if you demand it. If you have not reached a special agreement with your carrier, the time to do so is now.
Alternatively, it may be time to renegotiate. For larger companies, a method that has often proven successful is to give your favored carrier about 70% to 80% of your business and give a second carrier 20% to 30%. This way, both carriers will be striving for more of your business and will be more likely to give you the best possible rates.
5. Watch for off-contract IXC invoices.
Normally, invoices for services covered under a contract come in a distinct package from an IXC, usually just a few times a month. If you are getting additional straggling invoices from an IXC, there's a good chance the contracted rates are not being applied to the services covered on those invoices and you're paying more than you should be.
The circumstances presented here are not rare or extreme; they are real examples of what often occurs. Knowing what to look for gives you the potential for tremendous savings. If you cut your cost-per-minute by half a cent, you'll save $5,000 for every million minutes of usage. Similarly, if you find five disconnected central office trunks and five disconnected OPS lines that you're still being billed for, you can easily eliminate $500 to $1,000 per month - and you may get a credit on top of that.
So the message is simple: Stick to the fundamentals, and you'll find the savings.
