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Media Advisory: Reign in Telecom Expenses to Help Weather the Current Economic Storm

Posted on: March 19, 2009
Release date: 3/19/2009

Tangoe CEO Al Subbloie recommends top three “must do’s” for enterprises to shore up their IT budgets without hindering long-term growth opportunities

ORANGE, Conn., March 18, 2009 – In today’s economic climate, enterprises are re-evaluating all operating expenses, including telecommunications budgets, to streamline processes and expenditures. On average 1-2 percent of an enterprise’s total revenue is spent on communications, and these costs are among the top three expenses after labor. In the face of today’s uncertain business environment, corporations are being challenged to adjust their communications costs in consideration of both current and future business requirements.To assist companies in balancing these considerations, Al Subbloie, president and CEO of Tangoe, Inc., offers three important things every IT department must consider doing in order to weather the current economic storm and be positioned for a quick and efficient ramp-up when the storm passes and markets begin to rally.

Negotiate for the Long Haul
Many carrier contracts (often spanning three years) were negotiated before the economic crisis reached its current intensity and scale. In light of lower enterprise revenues and reductions in corporate staffing, many of the service volume commitments outlined in existing carrier contracts may be in question. Put simply, companies may fall short of their expected carrier usage due to downturns in their expected business volume.

Companies must know whether they will meet existing carrier commitments and understand any payment that might be due the carrier as a result of a shortfall. Consult your contract terms, which may include a business downturn clause that can adequately relieve the company of commitment volume and liability of shortfall costs. Once the commitment cost risks are assessed, it may be appropriate to renegotiate the agreement. In these cases, it’s always better to negotiate before the expiration of the contract and the accumulation of a significant shortfall amount. Negotiating before contract expiration provides the highest probability of arranging an alternate outcome. Early negotiations might include an extension of the contract term or a carry forward to a subsequent contract.

Keep in mind that communications vendors offerings’ undergo frequent changes and companies should be aware of what options might be available to them before they approach their carrier for contract discussions necessitated by a business downturn.

Take Control of Mobile Management
Mobile devices are an invaluable component of an enterprise’s short- and long-term plan to optimize and/or boost worker productivity and create a cost-efficient and effective mobile workforce. In fact, mobile device usage within the enterprises has grown more significantly than any other communications type, a trend predicted to continue at record growth rates. If not properly managed however, mobile devices create more expense along with an increased risk of data and device loss. To offset these risks, implement an in-house network and device management solution to track usage and applications and provision devices in real time. This way, whether you need your IT department to evaluate the most cost-effective service plans assigned to individual handsets today, minimize help desk service calls, or want to be ready to scale your mobile workforce quickly within the next 12-24 months, you will be ideally positioned with a solution that can dramatically reduce costs and improve operational effectiveness.

Understand Your Inventory
One of the more common pitfalls of enterprise asset management is an inaccurate view of the enterprise’s communications asset inventory—both physical and logical. As a result, organizations often fail to deploy the appropriate resources needed to support the organization’s needs. Without accurate inventories, some companies err on the side of caution and incur expenses greater than necessary. Others may maintain inventory and service levels well below what is adequate, which negatively impacts communications effectiveness and organizational productivity. In either case, these conditions can have a significant impact on costs. Even more important, inaccurate inventories have a profound effect upon an organization’s ability to manage business downturn and/or growth cycles.

Do you have the appropriate level of fixed and mobile communications assets that meet the needs of your workforce? Are your carrier agreements appropriate for your current and future business requirements? Can you scale back or ramp up quickly with the ability to re-provision and realign resources based on current business activity? These are only a few of the important questions to ask as you take stock of your organization’s communications contracts, inventories, and practices. In light of the dramatic changes in our business environment, organizations would be wise to take a fresh look at these issues to be fully prepared to meet the challenges of the future.

About Tangoe
Tangoe, Inc., a global leader in communications lifecycle management solutions, provides software and technology-enabled services that help global organizations to procure, manage, and control their fixed, mobile, and converged communications assets and their costs. Tangoe’s software and service solutions are built upon patented technologies that enable dramatic cost reductions and productivity improvements, which significantly contribute to their client’s profitability. Global 2000 organizations worldwide depend on Tangoe solutions to more effectively manage their telecommunications processes.

$35+
Billion

of spend under
management

10+
Million

devices managed
globally

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