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Savings that telecom expense management providers miss

Theresa Knutson, Julie Gardner and Janis Stephens, TechCaliber | Aug. 28, 2015
TEM services perform basic checks, but it’s not practical for them to pursue the forensic analysis necessary to catch the billing errors outlined here.

In some situations we found the carrier incorrectly entered the NPA/NXXs. This can happen any time you install or upgrade a circuit. Working with our client we were able to locate the original orders to document that the NPA/NXX had been provided correctly. These issues can be proactively managed by making sure your contract includes all NPA-NXXs in use at your sites or references all available CLLI codes.

Local Services deserve their own special place on the list as they tend to be one of the messiest billing areas we see and are not often reviewed at the level of detail required to identify overbillings. We routinely find that discounts are missing, contract renewals are not implemented, different USOCs are used for ordering than are specified in the contract, etc. The credit process for local services is like a carnival ride that won’t end. Credits are almost always inaccurate and require multiple iterations to complete. We have seen credits issued for 1 b-channel vs the 115 actually overbilled, 1 port vs the 5 actually billing, etc.

Final words of wisdom

TEM providers deliver good frontline services, and they catch a lot (telecom billing is notoriously inaccurate),but they are not the whole solution. Many large companies have come to rely solely on TEM software and firms to identify billing errors and optimization opportunities, and have lost the internal expertise to identify complex billing errors. But sole reliance on a TEM provider to uncover all billing errors is a mistake.

Most TEM services focus on processing multiple supplier invoices swiftly and efficiently, and perform basic checks on the invoiced amounts. These are absolutely basic services that you want and need, but TEM software audits and variance analysis did not pick up any of the billing errors discussed above. It’s not practical for the TEM service regularly to perform the forensic analysis of bills necessary to catch the type of billing errors in the examples above. TEM services need to be combined with periodic deep dive reviews of your telecom bills by experts, whether internal or external. Putting the right expertise in place to do the job is key.

If you haven’t conducted a deep dive review of your telecom spend to audit the performance of your TEM provider, you are likely paying more than you should be every month.   In the instances noted above, the recoveries were substantial and illustrate how a single error can quickly become a significant and material issue.

Billing audit best practice is to perform detailed billing audits annually (more regularly if a major supplier limits your ability to recover billing errors to less than one year – another practice we don’t recommend). Use the knowledge gained from these periodic audits to negotiate effectively with your TEM provider --   TEM pricing structures often provide for incremental fees when they discover errors, but rarely penalize the TEM for missing billing errors.


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