How
a Texas REIT Cut Telecom Costs by
$31,010.04 - at 8 Only Locations
This
month's issue of the Telecom Tips and
Strategies newsletter is a "real
world" issue - a detailed look into
a portion of a voice service audit that
TelCon
Associates recently completed for
a Texas REIT.
Our intent for presenting this telecom
audit case study is twofold: 1) to stress
the importance of thorough and routine
telecom
auditing of your voice and data services
as part of your overall cost-reduction
strategy, and; 2) to provide you with
the specific cost-saving strategies we
employed while conducting this audit so
that you can use and apply some or all
of them to help reduce and manage your
company telecom spending.
Although this REIT's real estate portfolio
consists of a total of 150 apartment communities
located in a variety of states, TelCon
was engaged and instructed to conduct
a "test" audit of only eight
locations. This "micro-audit"
enabled TelCon to provide the REIT with
a general overview of telecom services
for communities chosen at random. The
specific communities to be audited were
decided on by the REIT executives.
For purposes of brevity as well as clarity,
we have reduced the entire audit into
important areas for savings and then categorized
them into the following strategies:
Telecom
Strategy # 1: Identify and Eliminate Unused
Lines
Most companies (especially multi-location
ones) are paying monthly fees for unused
or unidentified telephone lines. Our apartment
community audit turned up numerous instances
of this. Not only were many lines going
unused, there were some that could not
even be identified.
The fail-safe method for identifying lines
that are not being used is to take the
time to call each one and determine the
location of the line itself. Always allow
a connection to ring at least 20 times
to eliminate the possibility it being
a security or alarm line.
In addition, user
surveys can be extremely helpful in
the process of identifying lines that
are going unused. By simply asking questions
of users at a specific location, you will
gain much information about the usage
patterns for all the lines at that location.
If employees have difficulty identifying
or even recognizing a telephone number,
it is safe to say that line is probably
going unused and can be eliminated.
Telecom
Strategy #2: Use "Backup" Plans
for Low Usage Lines
Every
business has lines (i.e. alarm lines,
elevator lines, metering lines, pool lines,
security lines, gate and entry lines,
etc.) that are functional but infrequently
or sometimes even rarely used. In the
case of our apartment community audit,
we discovered many instances where security
lines were subscribed to plans that were
designed for high usage voice traffic.
For example, more than one community bundled
two security lines onto a "complete
choice" two-line plan for $134 per
month. Although not widely advertised,
many local carriers offer low usage plans
with low monthly fees and per minute rates
for calling. In this case, we recommended
a "backup line" plan for the
security lines at only $21.38 per month
and 5 cent per minute calling fees. Since
these lines are rarely used, the per minute
fees generally will not apply. The savings
on this example alone totaled $1215.36
per year.
Telecom
Strategy #3: Eliminate DSL Service on
Fax Lines or Unused Lines
Many
organizations and businesses now use high-speed
dedicated internet service throughout
their organization. Prior to this however,
some subscribed to DSL services offered
by local carriers. A problem arises when
users fail to disconnect unused or fax
lines from DSL services at the time they
make the change to other dedicated internet
service options.
Our REIT audit turned up instances where
fax lines were still being charged for
DSL service even though the community
was utilizing a 512kbps dedicated internet
service.
If your organization has used DSL in the
past, or continues to employ DSL services,
be sure that you keep an inventory of
the lines that are subscribed. Eliminate
DSL service on fax lines and other lines
where the service is simply not needed.
Telecom
Strategy #4: Cancel Unused/Unneeded Features
on Low Usage
Today's
local service providers offer a huge variety
of local service calling features. These
added features can be a huge profit center
for local providers - especially for unsuspecting
consumers and businesses who pay for them
and subsequently never use them.
Our REIT audit uncovered numerous low
usage lines with features such as: "call
forwarding busy line", "call
forwarding busy don't answer", and
others that added no value to the lines
on which they were placed. Eliminating
a $3.00/mo feature on one line may seem
trivial but the cumulative affect of many
lines over many months' worth of billing
can be substantial.
Telecom Strategy #5: Consider Longer Local
Contract for Huge Discounts
Local
service providers love contracts - the
longer the better. Service contracts allow
carriers to not only "lock in"
a customer, but also help them project
revenue for longer periods into the future.
As beneficial as they are to the carriers
themselves, local service contracts can
benefit the customer as well.
For example, many multi-location companies
(those that contain entities such as apartment
communities, satellite offices, franchises,
etc.) will typically have 5-10 lines per
location in use. In the case of our audit,
we identified one apartment community
that was billed $323.00 per month for
5-line local service plan. By signing
a 36 month contract, we were able to reduce
this bill by 40% - resulting in a savings
of $1720.92 per year.
Be aware that most local service contracts
will require long-distance service to
stay with that local carrier. It is best
to analyze ALL factors to determine the
absolute best options. Our recommendation
in this case was to go for the longer
contract and reap the savings since very
little long distance was being used at
this location.
Telecom
Strategy #6: Cancel Directory Advertising
Unless Absolutely Necessary
It is hard to imagine the world today
without the internet and search engines
such Google and Yahoo. For most of us,
the days of looking for information in
the White Pages or Yellow Pages are a
thing of the past.
Despite that, the majority of businesses
today still feel the need for White Pages
and Yellow Pages listings. Unfortunately,
directory advertising continues to be
extremely expensive. In the case of our
audit, we identified one apartment complex
that was paying $51.00 per month for a
"bold" listing in the area White
Pages directory. Employees at the location
had no idea that the listing even existed.
Our recommendation was to cancel the listing
(in writing) and pocket the extra $600+
per year in savings.
Telecom
Strategy #7: Cancel LD Service Where Needed
to Avoid Minimum Monthly Charges
