When the CEO says, "Cut those wireless costs!"
A few months ago, I met with a large company that had issued an RFP, looking for help in managing wireless phones. This was a conglomerate with 30 independent companies, many thousands of employees, and thousands of cellular phones.
Apparently, "Tony," the CEO, had been noticing the rising wireless costs. Since cell phones are used outside the office, it's easy for senior management to think that staff are abusing their privileges, using these expensive devices whenever they feel for non-urgent and personal calls. This became Tony's pet peeve.
So, my team met with one of their telecom managers, the Director of IT, and the CIO. The CIO explained that she had more pressing work to do, but because it was Tony's pet peeve, she was was begrudingly pulled into dealing with this important, but non-critical issue.
Until that time, their wireless "management" had been extremely disorganized, with some offices having consolidated billing, others with individuals expensing costs back, different contracts with different vendors, etc… a big mess!
There are three distinct ways to manage wireless telecom costs.
1) Decentralized. Everybody buys their own equipment from wherever is most convenient, receives their own bill, and expenses it back to the company.
2) Centralized. Purchasing wireless devices and services is done by only one designated department, and billing is consolidated and billed to one place.
3) Outsourcing. A third-party company is hired to handle orders, take care of billing, price plans " just about everything.
Each of these methods has advantages and disadvantages. Let's take a closer look.
Decentralized
Pros - Less admin work for the telecom team
Cons - No visibility on spending details, no inventory, no price optimization
Since every employee would take care of ordering new batteries, replacing equipment, warranty issues, etc. on their own, the telecom department does not need to get involved.
Some companies have tackled the issues of controlling cost and usage by negotiating volume pricing, but still having the vendor bill individually. Also, each user has a cap on how much they can expense back to the company.
Questions:
How would you know if the vendor is charging the billing correctly, aside from pestering the accounting staff to retrieve copies of all the expensed cell phone bills?
How would you know if the expense cap is a reasonable amount? You might assign $80 for each employee, but it may turn out that most only require $30. In that case, people will likely spend as close to the $80 limit as possible, even if they would otherwise only be spending $30!
This decentralized model could be the best option for a company culture where everyone does their own thing, and there is a shortage of telecom management staff (as if any company ever has an excess!).
Next week, we'll look at pros and cons of centralized wireless management.
Until then,
Roger Yang
Author, What Great Telecom Managers Know
CEO, Avema Corporation
Back to Signup Page
A few months ago, I met with a large company that had issued an RFP, looking for help in managing wireless phones. This was a conglomerate with 30 independent companies, many thousands of employees, and thousands of cellular phones.
Apparently, "Tony," the CEO, had been noticing the rising wireless costs. Since cell phones are used outside the office, it's easy for senior management to think that staff are abusing their privileges, using these expensive devices whenever they feel for non-urgent and personal calls. This became Tony's pet peeve.
So, my team met with one of their telecom managers, the Director of IT, and the CIO. The CIO explained that she had more pressing work to do, but because it was Tony's pet peeve, she was was begrudingly pulled into dealing with this important, but non-critical issue.
Until that time, their wireless "management" had been extremely disorganized, with some offices having consolidated billing, others with individuals expensing costs back, different contracts with different vendors, etc… a big mess!
There are three distinct ways to manage wireless telecom costs.
1) Decentralized. Everybody buys their own equipment from wherever is most convenient, receives their own bill, and expenses it back to the company.
2) Centralized. Purchasing wireless devices and services is done by only one designated department, and billing is consolidated and billed to one place.
3) Outsourcing. A third-party company is hired to handle orders, take care of billing, price plans " just about everything.
Each of these methods has advantages and disadvantages. Let's take a closer look.
Decentralized
Pros - Less admin work for the telecom team
Cons - No visibility on spending details, no inventory, no price optimization
Since every employee would take care of ordering new batteries, replacing equipment, warranty issues, etc. on their own, the telecom department does not need to get involved.
Some companies have tackled the issues of controlling cost and usage by negotiating volume pricing, but still having the vendor bill individually. Also, each user has a cap on how much they can expense back to the company.
Questions:
How would you know if the vendor is charging the billing correctly, aside from pestering the accounting staff to retrieve copies of all the expensed cell phone bills?
How would you know if the expense cap is a reasonable amount? You might assign $80 for each employee, but it may turn out that most only require $30. In that case, people will likely spend as close to the $80 limit as possible, even if they would otherwise only be spending $30!
This decentralized model could be the best option for a company culture where everyone does their own thing, and there is a shortage of telecom management staff (as if any company ever has an excess!).
Next week, we'll look at pros and cons of centralized wireless management.
Until then,
Roger Yang
Author, What Great Telecom Managers Know
CEO, Avema Corporation
Back to Signup Page