Managing Indirect Spend: Enhancing Profitability Through Strategic Sourcing

CHAPTER SEVENTEEN

Negotiating Local and Long-Distance Telecommunications Services

THE SPEND CATEGORY OF TELECOMMUNICATIONS is ripe with savings opportunities. There are two primary reasons for this. First, the information technology (IT) or management information system (MIS) teams responsible for making decisions about infrastructure and configuration are often not focused on cost or trained in negotiations and strategic sourcing. Second, the accounts payable team or other parties responsible for paying the invoices are not necessarily familiar with the services or contracts and cannot make a determination as to the accuracy of any given charges. The combination of these circumstances normally leads to inflated cost structures and opportunities to achieve savings through an audit of infrastructure and contracts and reprovisioning and recontracting of services.

IT and telecom directors care most about maximizing uptime and minimizing complaints about their systems and resources. Naturally, that objective drives their tendency to choose more robust, and usually more costly, solutions to ensure they are keeping the company’s voice and data systems running smoothly. The problem is that there are usually less expensive, more streamlined solutions that readily meet the company’s telecom needs, but they may not have the time, resources, market intelligence, or understanding of the provider’s pricing structures and offerings to make an informed decision. The result is to revert to their ...