Organizations Seek Help Reducing Wireless Costs

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Most organizations are spending too much for their wireless services--about 25-35% too much according to the experts. Yet getting a handle on wireless expenses is no easy task. In fact, many organizations are bringing in wireless cost management firms to gain visibility and control of their wireless assets.

Telecom spending has become one of top five expenses for most enterprises, with wireless services accounting for a large portion of that expense. By year-end, corporate wireless spending is projected to reach 37 billion nationwide. So it’s not surprising that many businesses are taking a hard look at their wireless bills and employing management companies and consultants to help them to cut costs.

According to Gartner researchers, wireless cost management can save a company 25-35% of its ongoing annual expenditures for wireless services. For organizations with hundreds or thousands of employees carrying multiple wireless devices, that translates to several thousand dollars each month and millions of dollars over the life of a contract.

Organizations are turning to wireless cost management firms to maximize their wireless spending and cut costs because of the inherently complex nature of wireless assets—a dizzying array of constantly changing rate plans, volumes of billing data, and hundreds of mobile devices to inventory and track. Most organizations simply do not posses the staff or specialized tools and experience for effective cost control.

Wireless cost management firms deliver the single greatest savings through “rate plan optimization,” a process in which an organization’s usage patterns are compared to a database of available rate plans. Consultants utilize proprietary software programs that transform megabits of monthly billing data into actionable information that can reduce costs. The analysis also uncovers zero-use lines for possible deactivation, employee abuse, and unnecessary add-on services.

Even customers locked into a current contract period can achieve significant savings through rate plan optimization without changing carriers or changing the way employees use their phones. For added cost savings, consultants recommend that organizations conduct quarterly optimization.

While rate plan optimization provides the greatest single savings opportunity, most cost control approaches also include: contract optimization and compliance, usage policies, asset management, and on-going review. The key to successful contract optimization is determining an organization’s current and projected wireless needs, conveying this information to potential carriers, and evaluating the proposals based on service requirements. Consultants will usually conduct an analysis of at least three months of billing data to determine current service levels and assist with projecting future needs. Consultant’s knowledge of carrier contracts, rate plans, fees and negotiating tactics can also be a vital asset in the procurement process.

Throughout the life of the contract, it is important that contract terms are monitored and enforced and that all important contract milestones, spend commitments, and renegotiation dates are met. Contract compliance is complicated by the fact that management of wireless assets is often decentralized. In many organizations, end users are unaware of contract requirements to remain in compliance. Management firms offer administrative tools to ensure that organizations can easily monitor their contract terms and avoid possible penalties and added costs.

Consulting firms also assist organizations in developing, monitoring, and enforcing effective usage policies as well as tracking physical assets. Implementing usage policies and asset management processes save a company money by governing not only the acquisition and tracking of wireless assets, but employees use of them. Organizations have saved millions by adopting centralized acquisition policies thereby eliminating multiple carriers and employee liability lines. Without end-user policies, employees tend to do what is best for them personally—which usually ends up hurting the company.

Industry experts are predicting that corporate cellular phone and wireless device usage will continue to grow exponentially. By 2007, more than half of the organizations with more than 1,000 employees will use at least five wireless technologies. As wireless usage increases, the importance of managing its cost becomes paramount. With the help of wireless cost management firms, companies can take charge of their wireless assets now and begin to cut wireless and administrative costs, gain access to industry experts, centralize wireless management, and best of all, directly improve the bottom line.

About the Author: Kendall Hyatt is a former wireless carrier executive and founder of Enterprise Solutions Group, a wireless cost management firm based in Houston, TX. Enterprise Solutions Group offers additional information about reducing wireless expenses on their website:

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