Identifying Spend Detail in My Next Carrier Negotiation
If you’ve ever tried and failed to understand the totality of your company’s monthly telecom billing, you are not alone. Very few companies have a clear, complete understanding of their telecom contracts and invoices. Even companies that outsource the job to a telecom expense management (TEM) firm are hard-pressed to sort things out fully. And the inventories kept in TEM platforms are usually insufficient as a demand-sets for cost determination.
And that confusion, those missing or loose ends, can hurt you. They can adversely impact telecom negotiations, result in missed savings opportunities, and cause you to inaccurately allocate costs across the organization.
If your business were an episode of Survivor (and in many ways, it is) and you were challenged to gather all your current carrier contract documents and one complete month of carrier invoicing, could you do it? If the answer is no, again, you are not alone. You are a part of the majority. Could you do it during the commercial break or would it take you days or even weeks? Would you be able to hunt down all the paper invoices? Would other invoices be online? Would you need other departments to pull it all together? When time ran out would you feel confident you had everything?
Confusion Is Your Enemy
Many companies are challenged in their ability to provide a complete picture of their telecom contracts and invoices by things like acquisitions and mergers that result in legacy agreements or disparate accounts payable centers processing different pieces of your billing.
What’s worse, many carriers rely on this melee of staggered start/end dates, or multiple and complicated contracts, to perpetuate their ability to prevail in negotiations. Confusion is their ally, it’s your enemy. After all, what you don’t know hurts you, not them.
We’re Spending How Much for That?
Shouldn’t your TEM-based inventory be the spend basis for new contract negotiations? Well, it’s not their fault, but line and circuit inventories in TEM platforms are very different than spend inventories required for carrier negotiations. And asking carriers to supply what you need is also a loaded request. It’s not their priority for sure, and timeliness and accuracy are often an issue. Never the best way to start contract negotiations. Even the most well-intentioned of carriers might leave something out.
But without a complete set of documents – contracts, addendums, amendments – and the terms and liabilities those documents represent, you cannot fully leverage your buying power. It’s a bit like going into battle without understanding all the weapons, tools, and strategies you have to fight with. If you don’t understand 100 percent of your spend the way the carrier does, you will never succeed at fully minimizing your costs and maximizing your savings. The carrier will concede points on high-visibility line items only to raise them in obscure areas of the contract where you lack visibility.
HD Telecom Negotiations
TEM firms can help, but they’re designed to process invoices and allocate costs. They are not built for, nor are they intended to help with, negotiating contracts. For that, you need raw data, the original invoicing to get to your net effective rates.
That’s what professional telecom negotiators do. They help you gather all your documents; they help you understand what you’re paying for; They help you get the maximum savings possible.
Once you have the big picture, a high-def version of your contracts, addendums, amendments, invoices, services, you can determine your net effective rates; you can start to leverage your buying power. Now, you’re talking to the carriers on an equal footing. Now you know what they know. Now you’re getting the best terms, the best rates, and the best service mapped to your business as it is today. It all starts with establishing the spend baseline.