How to Save on Telecom in a Down Economy
Has your business IT budget suffered due to the recent downturn? Are you facing important decisions like layoffs of valuable well-trained personnel while trying to make vital upgrades that will allow you to continue compete in the city, state or global marketplace? Trust me, you are not alone. Our phone continues to ring with clients asking how they can save on their hardware, software and telecom expenses.
Telecom – An Indispensable Expense
Before making any major changes, business owners and managers undoubtedly look at all expenses, but they may not know exactly where to look to find savings. They may be surprised at the savings they can find in their telecom services.
We understand there is a fine line you walk when it comes to your telecom expenses. If you think about it, your telecommunications services are just as important as your utility services. If you cannot professionally and adequately communicate with your vendors, partners, suppliers and clients, you will quickly be out of business.
What Are Your Options?
Audit Your Inventory
In case you have put this off, this would be an excellent time for your organization to do an audit of your circuit and/or POTs line inventory. You would be surprised what services don’t get disconnected over the years and continue to bill. This is an extreme case, but as an example, we have a client with 55 locations for whom, after an audit of invoices and site surveys, we found over 300 lines that were not being utilized whatsoever. We were able to have most of these circuits disconnected immediately, which resulted in a savings of over $15,000 per month.
Renegotiate Your Terms
Telecom carriers are by no means immune to the recent downturn. Just like you, they are struggling for every dollar of revenue and trying desperately to minimize their costs. Also, like you, they cannot afford to lose one customer, even if that means they will have to write down the business.
If you have services today that are more than you need for your operations, you may be surprised to find that carriers will be willing to negotiate with you. Undoubtedly they will ask for something in return, such as a longer term or, if you have room, an increased commitment. This may sound counter-intuitive, but you may also find that you can sign a new agreement in the middle of your term for a lower price while improving your services and bandwidth.
Due to the more widely available products such as Ethernet, Fast Ethernet, VoIP and others you will probably find that you can get more for less. Be careful though, some of these technologies come with growing pains associated. Most of these technologies, depending on the carrier, will perform flawlessly over time.
Exercise Business Downturn Clauses
If your carrier contract has business downturn clauses, those can be exercised with some documentation provided. Most of these clauses are pretty loose in carrier agreements, and with any documentation, you have a case to downsize your telecom infrastructure. If you experience any pushback here, you can always remind your carrier that some spend is better than no spend in the event that you go out of business due to your telecom expenses. In most cases, it is just a matter of finding the right person to explain your situation. We would recommend you start with a sales manager or, even better, a sales director to state your case. This will typically save you time and headaches.
Upgrade Your Technology
Technology refresh clauses in your carrier agreements are also an excellent way for you to reduce your spend while improving your services. Due to the increased efficiencies in carrier networks, you can expect to spend less for the latest WAN technologies – and why not upgrade now in an economic slowdown?
If you are currently negotiating a new carrier agreement, be sure to ask for a technology refresh clause and a business downturn clause. These terms are often overlooked and the carrier generally provides them with little to no pushback. Arguably, you won’t need a technology refresh to upgrade in this business climate. Carriers are more than willing to move you to their less expensive networks because they have improved margins, which means you can expect to pay less. It will help you in the negotiations to know this going into it.