Managing your Contact Center’s Telecom Costs
By Colin Taylor, CEO, The Taylor Reach Group, Inc.
The economy is in decline, jobless numbers and unemployment are growing and companies are being asked to cut costs operate more efficiently. Call centre managers, used to “doing more with less” are now being asked to “do more with none”. Where can a manager turn in their efforts to improve the efficiency and reduce the operating costs in their call or contact center?
There are a number of cost centers within a contact center, including: labour, technology, service costs and overhead. In this article we examine the opportunities to save costs on telecommunications expenses. Telecommunications costs are one of the most significant cost areas in any contact center after labour. Telecommunications is also the second highest non-operating expense for the average Fortune 1000 firm. This cost includes local and/or long distance service fees, lines, circuits and features.
Telephone usage and service invoices always appear to be written in some arcane language regardless of the company issuing them. Instead of words and descriptions that can be understood telephone companies (telco’s) instead employ codes like ARX-325 to describe an off premise extension or tie line. The very language and structure of the invoices make them unintelligible to mere mortals. Some Telephone companies issue separate invoice for services and for equipment, which doubles the confusion. As a result few companies can genuinely verify if there invoices are correct and accurate.
In reality all companies should check their phone bills. Most telco invoices are inaccurate, often 30% of the charges are incorrect, and in some organizations the figure is even higher.
So in examining your phone bills the first place you need to start is with an inventory of the phone lines and circuits that you have installed and are using. If you receive separate equipment and services billing then the equipment invoice is the best place to start. Make a list of all of the lines and/or circuits, T1’s, PRI’s and equipment. For each line list the features or service that should be associated with the line/circuit. Look at the lines and circuits that show usage. If there is no usage on a line or circuit and you don’t understand why, then investigate. It is not uncommon for lines that have been removed to still be on the invoice, complete with the features and services that were associated with that line.
Usage, long distance, toll free charges are generally easy to identify as they show activity and likely someone is already reconciling these activities. Long distance fees may be significantly less today than they were a decade ago, but you need to track and reconcile activity to ensure that you are getting what you paid for. More difficult to identify are feature fees that are only a few bucks time. These fees add up and quickly. Check your contract, and see what the rates are supposed to be charged. Are these the rates you are paying?
Back billing or billing for services outside of the period of the bill happens. While not often it happens enough that it can come as a nasty surprise. Some jurisdictions and tariffs allow for back billing of up to 7 years. Telcos have to charge or recharge based on bills they themselves get from other carriers. Or they find something for which they forgot to bill or in very rare cases where they overbilled. This gives some leeway to you for going back through the bills and finding where you were overcharged. One case we know of got credit for 5 years of charge for circuits billed but not installed, in another case a refund for more than 3 years of circuits billed but not installed. These two situations resulted in the organizations receiving refunds of more than $500,000 and over $100,000. This also explained why the center was always experiencing a blockage problem.
Another area where charges can sometimes be found is for past Yellow Page ads you may have run. Compare the markets and locations where you believe the ads are to run and ensure they are. Also check markets where you advertised in past and see if the ads are still running or if you are paying for ads you don’t want or don’t have.
Analyzing your phone bills is something you can do, but there are also companies that will do this for you, generally for 50% of the saving they find.
Paying for services you don’t receive is just one way that organizations can pay too much for telecom. Many companies pay above market rates for services. Ask for prices from at least three providers for all of your telecom services. Check with your friends and acquaintances in the trade. There is almost certainly a lower price to be had. Almost as bad a paying too much for services is buying more services than you require. Most companies poorly configure their requirements and are motivated to ‘make sure they are up’ and the person responsible for telecom is often severely criticized for any ‘down time’. The motivation isn’t to ‘buy right’, but it is to ‘play it safe’. This contributes to an environment that results in over buying and overpaying.
Employees expect 100% up time all the time. Of course employees can also represent a source of inappropriate telecom usage. Most people have made a long distance calls from their companies. Some have made personal long distance calls and a small few regularly make extensive use of the company’s telephones to call friends and relatives half way around the world. A single call is not likely to break the bank. Hundreds or thousands of such calls will represent a significant expense. Worse, if the abuse is significant and on-going, it can actually blend into the business activity and mask the abuse. Implement Call Accounting and Best Available Routing selection. This way the phone system will route the call to its destination at the lowest possible cost and track who is making these calls. This technology is available on most telephone systems though a surprisingly small number of organizations actually employ them. Your use of these applications can be limited to employing account codes for staff long distance or up to blocking access to locations where you do not have business contacts. This approach will minimize potential costs should your system be compromised.
But internal threats are not the only ones your telephony systems may face. IP telephony systems are designed for remote access and to support remote workers. The remote workers access the IP telephony system through a login and password process. When a company access port is identified it is a relatively simple task to crack most 4 or 5 digit passwords. Once access has been secured hundreds of thousand of dollars of long distance costs can be incurred in calls to exotic locations. There have actually been reports of a black market in compromised phone systems that can be used for ‘free’ long distance. The telco can and will demand payment for these charges. So change your voicemail logins frequently and don’t use simple logins and passwords.
Telecom costs can be challenging to manage given the nature of the invoices and codes they contain. This complexity can also mean that savings are there to find. All you need to do is just dig.
In the next column in this series we examine how contact center organizations can reduce and more effectively manage the single biggest cost to a contact center operation: Labour, while still meeting all of the required Service Level Agreements and Key Performance Indicators.
Let us know what you think of Colin’s article send him an email at firstname.lastname@example.org.