Do a Google search on 'cutting telecom costs' and you will get a plethora
of articles, solutions, and consultants stating the importance of managing
telecom costs and doing telecom-cost audits. None of these companies operate in
India. Add the word India to the search and you will find a lot of stuff on
cutting down the absolute cost of telecom but virtually nothing about managing
the telecom costs.
What is happening is obvious. India has seen a huge drop in absolute telecom
costs, and rates are being constantly driven downwards. That is resulting in a
situation where the thought of managing telecom costs is secondary. But, what is
overlooked is, at the same time usage has spiraled upwards. Hence, the total
cost has not gone down in some cases. And in others it would not be surprising
if the telecom costs, as a percentage of total costs, have actually moved up.
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In some businesses, telecom costs may account for 30% or more of the total
cost. In the American and European contexts there is no downward movement of
rates and, therefore the imperative to manage telecom costs. Learning from that
experience, it is obvious that Indian companies-especially those whose
services are heavily telecom dependent-would also need to manage telecom costs
sooner rather than later. Yet, the subject has not got the attention it
deserves.
The main reason is that it is still not on the radar screens of most
organizations. Telecom costs are seen as business enablers and very often they
cut other costs like travel. So, higher-and sometimes indiscriminate spending-is
justifiable.
The conceptual framework for managing these costs is not substantially
different from other cost-management activities. To start with, most companies
are adding substantially to their telecom infrastructure at this point of time.
But is that a planned effort? How much leased line capacity to add at each
location? Which vendors to use? How many telephone lines are required?
On the operational side also, there are many questions. How to manage peak
loads? Can innovative ways be found to manage peaks? Can there be dialups for
peak loads? Or shifting the mail blasts to nonpeak hours? Can the critical tasks
be given a dedicated bandwidth during peak hours while others go on a lower
priority?
There could be an excess of devices in the system. Have the number of fixed
telephone lines gone down after the advent of mobiles and e-mail? Is it possible
that there are a large number of idle phones out there, which are consuming high
fixed rentals?
Are the rates that the supplier is giving the best? Are there better schemes
available? And since new ones are coming up each
day, are they being changed at periodic intervals? Are the best contracts being
negotiated with suppliers? Is the data and voice traffic being shared? Are VoIP
and Skype type of services being used? Where is the Internet-browsing time
going? Are we paying on downloads or on time basis? Are the billings accurate
and correct?...Or are mistakes being paid for without a thought?
The questions are many. And managing them needs a few basic steps. First, as
mentioned earlier, is the need for this to come on the radar of the senior
management. This has to be followed by appointing the right people. Telecom-cost
management needs regular audits, which the accounts personnel can manage. Proper
hardware and software tools are needed to provide the relevant data and
checkpoints, which has to be planned and provided for by technical people. The
nearest, in most organizations, are the IT departments. They also need to
upgrade their knowledge base substantially, if they have to play that role.
TCO-total cost of ownership-for computers has been around as a concept
for some time. Telecom needs its own total cost of telecom-TCT-to be
computed and managed. In the next couple of years this is going to be a major
issue for many organizations-if it has not become so already.