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Tuesday, July 22, 2014

Wireless Spend Is Eclipsing Network Spend: Telecom Outsourcer

If you like surprises — and even if you don’t — check your department’s monthly wireless communications bill. Do it, ideally, early in the morning, as the result is bound to be an eye-opener.

What you will discover is one of the greatest unknown costs of doing business: the price of being connected.

SONY DSCAccording to David Roberts, president and CEO of Teligistics, a company that uses patented software to source telecom contracts and assist companies in managing communications and related costs, wireless communications is the second-fastest growing employee expense after health care and has a far higher rate of annual growth.

“Mobility spends are eclipsing network spends,” he said. “It’s among the top five expense items for business and the one with the least financial control.”

Speaking at the ProcureCon conference in St. Louis, Roberts said Gardner & Associates Consulting puts the error rate in telecom billing at 10 percent or more. “We find it higher,” he added.

This black hole of cost exists because few managers pay attention to wireless bills, which typically represent a multitude of user plans and restrictions imposed by providers. Sometimes, the bills are not only hard to decipher but impossible to check. One client of Teligistics, for example, was receiving 22,000-page bills every month from its provider. Another client ended up with 294 wireless providers and 2,000 invoices per month.

A connected organization is an obvious necessity. And individuals are consequently increasing their use of mobile communications, which includes teleconferencing. During his presentation, Roberts asked how many in the audience used multiple wireless devices for work — cell phones, tablets, and laptop computers. Virtually everyone did, with many indicating that they carry two or three cell phones and some as many as five.

The goal of Teligistics, Roberts says, is to enable a company to reduce the number of wireless vendors, benchmark rates, and cut costs by 15 percent per employee. Teligistics sources contracts and negotiates their conditions of use to mitigate risk. It also manages telecom inventory, costs, assets, and circuits; handles moves, adds, changes, and disconnects; and audits and processes invoices.

ProcureCon 2013The process usually begins by launching a paperless request for pricing (RFP) to vendors globally, via the company’s proprietary software, which instantaneously analyzes financial data to determine which vendors have the best offers.

“We average 42 percent cost reductions, and some as much as 60 to 70 percent,” Roberts said. Teligistics manages four to six major RFPs monthly, and since 1997 has sourced $7 billion of contract value for clients, he said.

An RFP can be launched within 90 days and a contract fully negotiated in 60 days — what Roberts describes as an extremely rapid cycle.

The largest RFP that Teligistics has done attracted 143,000-plus vendors. The company reduced the field to 18 with its software, and five were ultimately selected. The client now deals with eight invoices per month and, more important, has annual wireless costs lowered by $51 million.

Teligistics is in Montgomery, Texas, near Houston.

 

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