Telecommunication and cloud expenses are among the highest non-operating cost for many large companies. As technology modernizes and contracts get old, are you getting the BEST DEAL that you can from your telecom and cloud suppliers?
Benchmarking the costs of each type of service you have can help reduce those telecom expenses.
What Is Benchmarking?
Almost everything. For instance:
DID / DOD Trunks
Cloud Services (SaaS, IaaS, PaaS)
Storage and Applications
What Are the Benefits of Benchmarking These Telecom Expenses?
When you benchmark your telecom expenses against the norms, you can:
- Discover hidden costs, unused services, competitive alternatives
- See what you’re paying in relation to comparable companies
- See how contracts can be re-structured to benefit your business needs (i.e. growth, downsize and technology Clauses to allow flexibility)
- Consider new technologies to replace legacy systems
- Save money
Report of PRI Current Environment:
|Product||Carrier||Low Benchmark||High Benchmark||Current Average Contracted Cost|
|PRI||XXX & YYY||$225||$500||$473|
|Average Contract Rate:||$473.00|
|Percent Above Mean||40%|
Assumptions and Considerations in Determining the Above:
LinkSource made the following assumptions in determining your company’s pricing position within the marketplace.
- The benchmark price ranges are calculated by reviewing current market data for customers of similar composition. They include but are not limited to:
- Similar Industry
- Similar Geography
- Similar size and scope
- The two carriers above represent the majority of these services in your environment.
- If the two suppliers are the preferred vendors to continue to provide services, you may want to negotiate with them to bring the cost down to be in line with market competitive rates.
- You might also consider consolidating other telecom services to these vendors as they can provide several of the services that you currently procure from other vendors, some of which we would recommend using them for based on other client experiences. Adding additional spend or commitment could aid in the negotiation process and drive down costs resulting in further telecom expense reduction.
- With these two considerations, you should be able to save approximately 24% per month in telecom expenses.
- If you consider an alternative provider, we believe contract terms would be more beneficial, commitment levels could be reduced, and pricing would be improved. However, the potential negatives would include a transition of services and the cost and effort involved in the migration. That said, we believe this alternative could produce a reduction of approximately 48% over your current telecom spend.
- You could also analyze the aggressive packages in the marketplace that include certain usage components. This could result in significant reduction in telecom expenses, but cannot be determined through this exercise.
- Recently many of our customers have migrated technologies from traditional PRIs to IP (SIP – Session Initiation Protocol) or hosted telephony solutions. If this were a consideration, we believe you could reduce telecom expenses between 50% and 100% because of cost reduction or elimination of the service from the network.
- These solutions can be implemented by both of your incumbent providers which could be covered under a technology migration clause in your agreements.