Telecommunications services are among the most significant expenses a business must manage. Vendor contracts, service plans, hardware, wireless devices, installation and maintenance, support—costs add up quickly. Finding ways to reduce telecom expenses isn't always easy.

At CenterPoint Group, we help clients carry out a cost-effective telecom procurement strategy for today's hyper-connected world. Read on for information about common challenges, and learn how our group purchasing advantage can help your organization meet them, too.

Identifying Common Telecom Procurement Challenges 

One common obstacle to reducing telecom expenses is a lack of visibility into wireless device inventory and usage. Without this insight, identifying areas for cost optimization can prove next to impossible.

A related challenge is the complexity of wireless costs across multiple departments or regions. Without a centralized approach to telecom expense management, capturing all relevant costs is difficult.

Negotiating favorable contracts with telecom vendors can also be a high hurdle. Businesses may not have the leverage needed to secure the best rates or terms.

And keeping up with rapidly changing wireless technologies and their pricing isn't for the faint of heart. Ensuring your cost savings efforts remain effective over time requires ongoing monitoring and analysis.

Pursuing Money-Saving Telecom Procurement Strategies

To reduce costs effectively, businesses must develop and implement telecom procurement strategies tailored to their needs. Here are four of the most pressing things to do:

Analyze Current Spending Patterns

One of the most critical steps in telecom cost reduction is analyzing spending. Gather all telecom invoices and contracts from service providers, equipment vendors, and others. Carefully review each to identify such key details as service charges, usage charges, and additional fees or surcharges.

Once you have a clear understanding of your spending, you can start to identify ways to reduce costs. For example, you may notice your company consistently exceeds data usage limits or pays for services and equipment no longer needed. After flagging these types of inefficiencies, you can adjust your plans or usage habits to better align with your needs.

One caveat: Telecom invoices can be complex and confusing. If you don't know how to analyze and interpret your invoices, seek help from someone who does. 

Optimize Plan Usage and Utilization Rates

"Plan usage" is how much data, voice, and text services employees use monthly. Employees need to be on plans that best match their usage patterns. To save money, businesses may need to switch employees to different plans or adjust existing ones.

"Utilization rate" is the percentage of time employees use devices. A low utilization rate indicates they're not using them as often as they should, resulting in unnecessary costs. Businesses can monitor usage patterns, identify inefficiencies, and take corrective action. They might provide additional training on the use of certain devices, for instance, or change policies to encourage greater use.

Optimizing your wireless usage and utilization rates can not only reduce telecom expenses but also improve employee productivity. However, such optimization requires regular monitoring, granular analysis of available plans, and clear communication with employees.

Negotiate with Telecom Service Providers

Procurement manager sits at his desk signing telecom contract, overlaid with digital icons representing telecom connections

The telecom supply chain is a global, interconnected network of suppliers. They provide everything from the hardware and software supporting network infrastructure to the services and applications provisioned on top of that infrastructure.

To negotiate with these suppliers effectively, businesses must be well-prepared and knowledgeable about the telecom supply chain. They should research industry trends and key players. They should also know their own strengths and weaknesses as a customer, as well as the provider's strengths and weaknesses. 

Negotiations can cover contract terms, pricing, service level agreements, and more. They often involve compromise. For example, a business may commit to a longer-term contract in exchange for reduced pricing or service upgrades. Alternatively, a service provider may offer a discount if a customer agrees to expand their services. 

But unless you're a Fortune 100 company, you may not have the "muscle" to secure more favorable terms. Even successful telecom cost reduction negotiations require a deep understanding of the industry and careful planning. If you don't have the time to devote to preparing for your negotiations, they're not likely to net you significant benefits.

Leverage Automated Account Management Solutions

Managing telecom accounts is tedious and time-consuming, especially when dealing with invoices from multiple service providers. Automated account management solutions can make all the difference.

Automated solutions help businesses streamline the complex process of Telecom Expense Management (TEM), as well as the specialized subset of it, wireless expense management (WEM), which focuses squarely on wireless service and mobile devices. Automation lets businesses:

  • Track all telecom-related activities across the organization more closely.
  • Monitor monthly spending and billing inaccuracies more easily.
  • Analyze usage patterns and establish new operational efficiencies more quickly. 
  • Identify telecom cost reduction opportunities more readily.
  • Observe contract performance more proactively (including automatic notification of when contracts are expiring).
  • Ensure compliance with internal policies more accurately.

But even the best automated TEM and WEM solutions have their limitations. Negotiating a more favorable contract with a carrier requires the human touch—and, often, aggregated purchasing power.

Using Group Purchasing Advantage to Improve Your Telecom Procurement  

Procurement manager sits at desk with her laptop computer, talking on smartphone to GPO about ways to reduce telecom expensesWhen your business is able to reduce telecom expenses, it has more funds to invest in innovating, gaining a competitive edge, and improving profitability. 

A group purchasing organization (GPO) is one powerful tool for telecom cost reduction.

What are the benefits of a group purchasing organization? It negotiates contracts with telecom service providers, securing volume-based discounts. It can also assist with budget management and provide ongoing guidance on best practices for reducing costs.

CenterPoint Group is an industry-leading, certified minority-owned GPO. We can help you lower your telecom expenses and keep them low, even as your telecom needs change and grow.

Our proprietary, innovative analytics give you unparalleled insight into telecom spending, plan usage, and utilization rates. We use our group purchasing advantage to secure you best-in-class pricing and the most beneficial contract terms from top suppliers, even for small businesses. We also offer continuing account management and data reporting and analysis.

Want to find out more about how CenterPoint can help your business's telecom procurement strategy? Contact us online or call us at (866) 229-6205.


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