Controlling Telecom Spend: A Complicated Business

Spend Matters welcomes some cautionary tales from Ben Mendoza, CEO of international telecom expense management experts MDSL.

Controlling spend in the telecom arena for very large organizations has always been somewhat of a high-wire act. But at MDSL, we know where the 'known knowns' usually hide. Plus, as Mr Rumsfeld once famously said, we can tell you where the 'known unknowns' can be found.

Take Unified Communications (UC). UC is frequently hailed both for the cost savings it can bring and the potential it offers to reach our work colleagues, no matter where they are or what device they use. However, with the sheer number of devices and the way our standard systems are organized, the transition to may be UC painful and costly if some simple lessons are not learned.

In the past, you only needed one key piece of information to call someone: his or her phone number. But no more. For the purpose of this article, think of UC as an application that sits on the company's private network, appearing as a window on your PC, laptop, iPad, cell phone, etc. It also often incorporates instant messaging, where you see a list of people with whom you can establish a text-based conversation.

So let's add the idea of making a voice call to one of these people. Easy: click on their name and their phone rings. It can be that simple -- but most people now have more than one phone (or 'end point' in UC terms). So what happens when you click on my name? Depending on how the system has been configured, all my 'end points' ring so that I get the call wherever I may be. Sounds great, doesn't it? The answer is "not always, from a financial perspective," as many companies are discovering.

The following scenario is based on real life. ABC Inc. has offices in New York, London and Paris and recently installed a private UC network for voice calls between them, with a 'gateway' at each site. These devices act as a 'bridge' between the internal private network and the external public network, for calls to anyone outside the company.

One morning, Janet in New York calls her colleague John in London. From her PC, she clicks on his name and, shortly after, John is on the line. What Janet doesn't know is that John is visiting a client in Dubai and has answered her call on his cell phone at 11pm (his time). When the call couldn't 'find' John in London, it travelled as far as it could to the Paris gateway, before leaving the private network and completing its journey over the public cellular network. In other words, Janet unknowingly just made a long, international call from Paris to a cell phone in Dubai, in the middle of the day -- all while thinking it was free.

A few weeks later, the Paris office receives the bill. No one knows anything about it or recognizes the number (we don't use numbers, any more). Worse, being office-based, the Paris team have no international roaming agreements in place so the call has been charged at standard -- very expensive -- rates. The local manager wants to know if this is an error or, at least where to allocate the cost (as it's not in his budget, which is now over-spent). Now imagine a large multi-national enterprise and multiply this 1,000 times -- and spread it across their global offices. You're starting to see the problem.

Here's another cautionary tale. ABC's CEO recently flew from New York to Paris. While there, he used his new corporate tablet to respond to email and review the new company website -- including video case studies. ABC's Paris office is outside the city so he hired a car but, conscious of costs, declined the satnav option, knowing that he could rely instead on his tablet's GPS.

He told himself it was fortunate that he'd thought ahead to have the IT Dept activate it for him before he left the US, and it had been interesting to track his journey as he travelled halfway round the world. It had come in very handy in transit in London, where he'd been able to research some off-the-beaten-track restaurants before making his final choice. Unfortunately, his flight was delayed on the return leg so, rather than waste money on another overnight stay, he opted for a later flight and downloaded a film to watch while he waited.

Anyone who knows anything about international data rates knows what's coming next. To put a new spin on old adage: Hell hath no fury like the unknowing CEO who's just been presented with his company's roaming over-spend, particularly when, with a little planning and advice beforehand, it could have been avoided.

These particular pitfalls are obviously out there. It's our challenge to come up with cunning ways to capture the warning signs and present them to you proactively, rather than reacting after the screaming starts. In the UC example, one of the main challenges is that global networks are often built with numerous components from disparate suppliers (Microsoft, Cisco, Avaya, etc.). Each component can only offer you clues -- like pieces of a vast data jigsaw -- and some clues are very cryptic. For example, there will be "clock drift" between devices in the different parts of the world: system clocks are never perfectly synchronized, so when you're tracing the origin of the 45 second call that was received at 17.43.10 in Dubai, you may have to use some "fuzzy" logic. But what a great picture you get when you've finally collected the data, especially if you visualize it on a map of your world to see exactly where the majority of off-net traffic is going. You may soon spot where a simple extension to your network would prove to be very cost-effective indeed. And a tip for the movie fans overloading on Netflix: investing in "near real-time" Mobile Device Management tools and flagging any policy exceptions -- before the company goes bankrupt -- is probably a very good idea.

If these tales of the unexpected sound too familiar, now's your chance to come along and hear about these and other spending pitfalls prevalent in today's global communications environment -- and how to avoid them -- as well as see the latest version of MDSL's telecom expense management solution, MDLS Smart TEM, on their US TEM Roadshow at the following locations: New York (Feb 21); Houston (Feb 22) and Chicago (Feb 23). Registration is free at

- Ben Mendoza, CEO, MDSL

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