NPI Warns of Autopilot Telecom Spending, Advises Enterprises to Optimize Carrier Contracts

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Research from IT and telecom sourcing advisory firm indicates widespread overspending on telecom services

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NPI reports average savings of 15 to 30 percent for companies that haven’t optimized carrier agreements in the last 18 months.

With enterprise telecom costs on the rise, NPI advises companies to perform carrier contract optimization for key telecom services. The IT and telecom sourcing advisory firm reports average savings of 15 to 30 percent for companies that haven’t optimized carrier agreements in the last 18 months.

NPI’s research into the voice, data and network spending patterns of more than 400 companies indicates many allow spending to go on autopilot – especially in areas like WAN and wireline services. Even with commoditized pricing for most telecom services, the majority of enterprises still overspend by 30 percent or more.

To eliminate telecom overspend, NPI advises enterprises to reopen carrier contracts and optimize pricing/rates, discounts, credits and business terms. This is especially crucial for companies that haven’t refreshed their carrier agreements in the last 18 months, those that have experienced significant business expansion, and those that have satisfied minimal annual revenue commitments (MARC).

Jon Winsett, CEO of NPI, comments: “Telecom is a notoriously difficult spend category to manage. For that reason, companies want to know where they can drive the most savings over the longest period of time for the least amount of effort and risk. The answer is carrier contract optimization. Enterprises that do this typically see savings in the range of 15 to 30 percent.”

At a minimum, NPI recommends companies address the following questions during contract carrier optimization:

  • Are we paying the lowest price/rate? Have we benchmarked pricing/rates to ensure we’re getting the best deal?
  • Are we receiving best-in-class discounts and credits based on current and historical spend volume?
  • Are cost-related contract terms competitive? Are there penalties or fees that we can negotiate down or out of our agreement (such as early termination fees)?

For more information on NPI’s telecom carrier contract optimization services, please visit http://www.npifinancial.com.

About NPI

NPI is an IT sourcing consulting company that helps enterprises identify and eliminate overspending on IT purchases, accelerate purchasing cycles and align internal buying teams. We deliver transaction-level price benchmark analysis, license and service optimization advice, and vendor-specific negotiation intel that enables IT buying teams to drive measurable savings. NPI analyzes billions of dollars in spend each year for clients spanning all industries that invest heavily in IT. For more information, visit http://www.npifinancial.com.

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Hannah Bower
Bower Communications
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