Profiles AG's 6 Steps to maximize 2011 Telecom Cost Reductions

We all know they're out there, Telecom cost reduction opportunities. This represents the number ONE way to cut telecom expenditure. But how does one maximize these opportunities. We would propose you follow these 6 steps to successful telecom contract negotiations. This is well known as the number one way to maximize 2011 and telecom savings.

Whether sole-source or competitive RFP, here's our recommendation for best results:

1.   Develop a current book-of-business - The goal here is to uncover as many of the price elements (typical client 500-800)that make up your current global spend as well as well as a technology review based on current and future needs assessment.

2.   Strategy Formation - Clarify and set objectives for going-forward pricing, terms, conditions and expectations for service levels. Any plans for new technologies expected during next contract term should be considered.

3.   RFP Issuance (Key to success) Clear vendor comparatives- Start with the end in mind; RFP must have the capabilities to provide you clear apples-to-apples comparisons for technologies proposed as well as pricing, terms/conditions and service level expectations.

4.   RFP review and analysis - A very important aspect of this step is a knowledge base and the experience to decipher multiple carrier responses and knowing appropriate follow up carrier questions to keep playing field even and fair for all participants. Just as critical and important to know is when market-leading rates are offered as well as current acceptable terms and conditions by carriers. This requires a working knowledge of the latest carrier global offers.

5.   Now the fun begins ... Contract finalized, internal approvals and signatures - Once you've achieved market-leading rates terms and conditions and SLA's, it's time to audit carrier contracts to assure the pricing offered in the contracts matches all proposed pricing. Align your internal legal and procurement resources and schedule time for their review and acceptance of vendor contract as well as time for direct vendor legal discussions for final approval.

6.   Very Important - Schedule reviews of at least first 3 bills - After spending 90-180 days analyzing, choosing, negotiating and executing your telecom contracts you want to be certain the prices negotiated are 100% delivered. At this time, we know you would rather put the contract in the file and not have to deal with it for 3 years to come. Our experience says pricing is never delivered flawlessly by any vendor. It requires a detailed audit and recovery process with credits back to the contract start date.

In closing, we strongly believe this to be the ideal way to accomplish maximum results for your company. For more details on how to maximize 2011 telecom cost reductions visit our blog Click Here.

Evaluate pros and cons of bundling wireless and wire line contracts before executing a new telecommunication agreement Evaluating whether or not to bundle a wire line services contract with a wireless services contract requires careful evaluation and consideration. As with any  telecommunications contract you must ask yourself what is in it for my organization. Remember carriers always write agreements that favor their side of the negotiating table. Typical wire line services contracts have contract duration and minimum revenue commitments that must be maintained. Failure to achieve the time frame and/or the revenue commitment can result in shortfall penalties that you are liable for.  

Wireless agreements typically also have contract duration and minimum revenue commitments. A difference between wire line and wireless agreements is that wireless agreements typically provision a discount level that is earned based on the revenue achieved. Spending more equates to achieving a higher discount while spending less will lower the discount. The penalty for obtaining a lower revenue threshold can be a couple of points lost in discounting. Some providers propose bundling wireless and wire line in order to offer you more favorable rates or terms. Wireless and wire line becomes a bundled agreement. Under this type of agreement wireless commitments now fall under a common revenue commitment meaning a decline in revenue doesn't only lower a discount, it is now aggregated in the revenue commitment and you could be subject to financial penalties rather than a lowering of discounts.  

As in any telecommunications contract negotiation, buyers beware.   

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