DON HOBBS
Director of Product ManagementTelecom Solutions
TELECOM LIFECYCLE MANAGEMENT WHITEPAPER
INTRODUCTION
Thanks to the power of technology and telecom – from the Internet to smart phones to tablets –
companies are connected to their customers – and in some cases employees are connected to their work – 24/7. This increase in connectivity leaves CIOs and key IT/Telecom managers with more responsibility to keep the network running and manage costs within tighter timelines. At the same time, companies are asked to do more with less while continuing to expand capabilities.
Ecova has developed the “Telecom Lifecycle Management 9 Box,” an overview of essential best practices that we advise companies to focus on in order to improve telecom performance, reduce costs, and stay in control of an ever-expanding network.
THE 9 BOX MATRIX
Whether a telecom environment has an annual budget of one million or one hundred million dollars, Ecova’s best practice approach provides companies with a strategy to deliver results. This
straightforward, nine-box matrix organizes the top three critical functions for success when managing a telecom and IT environment:
1. Financial controls and planning that impact the planning, tracking and validating of expenses 2. Network design and maintenance that focus on operating the network environment itself 3. Business and policy management associated with internal decision making and vendor
Each of these functions has three separate activity areas to manage, thus the “9 Box.” Within each of the nine boxes are specific components that drive a best practice approach, but before we address each of the nine areas, it is critical to recognize three primary umbrella elements that are necessary to success:
Management of telecom activities must be technology driven. With significant data to capture and manage, plus complex workflows and changing requirements, automation and rich information management are of paramount importance.
Companies must be structured to be proactive as well as reactive. This includes planning for future needs and changes, as well as having operational processes in place to address expected and unexpected changes or issues.
It’s critical to be efficient and “self-protective.” While planning, recognize the likelihood of shrinking human resources and ever-tightening budgets, even while keeping up with the fast-paced environment. Maintain the ability to respond efficiently and effectively to inevitable breakdowns in the plan.Understanding the requirements for Telecom Lifecycle Management success, let’s dive into the framework for the nine boxes, and review the breakdown of each of the key functions.
FINANCIAL
1. Set & Track Budgets
Budgeting begins by analyzing the main drivers within your business, and applying them to your telecom responsibilities. Where is your company headed? Are you growing organically or through acquisitions? Are your technology needs changing? And how will you respond to those changes? Are VoIP, tablets or upgraded data networks in your plans? Are there contract renewals/negotiations coming up? Understand and document all of the assumptions that factor into your budget forecasts so that you can validate and assess variances later. Actual vs. forecast differences are inevitable, being able to demonstrate where those differences come from puts you in control of your budget. Reforecast regularly, adjusting for budget outliers and changes in the market, business operations, or seasonal impacts.
2. Process Invoices & Allocate Costs
Automate processes for receiving, approving and paying invoices as much as possible to alleviate the pain of overlooked invoices and unnecessary late fees. Processing should be centralized and local site activity eliminated. Equally, data should be managed electronically where available; the days of paper invoices and payments are long gone.
Make sure telecom expenses are assigned to the appropriate GL and cost centers. When budget owners have visibility into where their money is being spent, you can work with them on their accountability. Openly communicating with these budget owners will empower them to make decisions to better control their costs and contribute to a healthy cash flow.
3. Validate Charges & Resolve Disputes
According to analyst estimates, up to 10 percent of telecom bills are not accurate. A best practice approach requires every invoice to be reviewed every billing cycle. Pay extra attention to “convenient” summary invoice formats which can make processing invoices easier but also mask potential billing errors.
Validation occurs at a variety of levels and is critical. Make sure that the charges always conform to your contract terms to maximize
hard-won price concessions. Confirm that you are being charged for the services you actually use by
reconciling invoice to inventory. One-time charges should always be verified, they are often excessively high or inappropriate to begin with.
Put yourself in a position to win with any dispute. Especially if an error is large, set a precedent with a single example that the carrier agrees to before bringing the entire dispute into play. Never accept less than you expect, especially if you have not escalated within the carrier hierarchy. Track all of your disputes and leverage them at contract time. Turn the “pain” of an error into a valuable bargaining tool!
NETWORK
4. Design Solutions & Deploy Service
As with budgets, knowing how your network supports business—both present and future—is critical for a successful telecom lifecycle management program. Invest the time and resources to understand first and design later. Don’t overlook adding extra expertise if needed. Questions to ask include, “What kind of information needs to be transported across the network?” “What kind of volume does your network need to support? What is our risk tolerance for unanswered calls and/or data transmission losses or delays?” Effectiveness in deploying the network is just as critical as the underlying design. Overlapping networks caused by vendor or technology changes must be managed with a high degree of attention to avoid outages or excessive costs. Equally, the rules of engagement for deployment of service should be thoroughly reflected in your contracts, including key contacts, escalation processes, performance expectations and more. Finally, document all the issues that come up in any deployment; they can be highly valuable at contract time.
5. Manage Inventories & Procurement
Telecom inventories are complex and require strong data management tools and processes to capture and report on. As companies grow, spreadsheets and manual processes get overwhelmed. The variety of vendors, service types and
nomenclatures makes it even more difficult. But if you don’t know what you have, where it is, what it costs, and what contract is covering it, you can’t run the most efficient network, nor can you stay on top of ongoing ordering and procurement processes.
10% of telecom bills
are not accurate.
Review every invoice,
every billing cycle.
Maximize Consistency
and Control:
Ensure your inventory
& ordering systems
are integrated
A centralized inventory system becomes the starting point for success. Ensure that your inventory and ordering systems are integrated to maximize consistency and control.
On the workflow side, four best practices can make all the difference. First, establish a centralized
approval process to handle each new request to avoid ordering unnecessary services. Next, always place orders in writing (especially cancelled services) and keep track of them for years. Third, double-check that all ordered services are associated with the appropriate contract and match your expected pricing and the services will contribute to any MARC you may have. Finally, validate each and every new charge against the order detail to ensure accuracy.
6. Maintain Service & Security
Networks are prime candidates to go down at the most inopportune moments. Suffering an outage isn’t a matter of if, but when. Service issues simply can’t be avoided, but they can be dealt with effectively. The old adage “an ounce of prevention is worth a pound of cure”, regular and routine evaluation of network performance can help avoid crises and ensure that the networks are running at optimal levels.
When incidents happen, your readiness and processes will make all the difference in rapid, successful resolution. The goal should always be to identify and resolve any outages or impairments as quickly as possible. For small teams, this can be difficult to manage, especially on top of normal daily tasks.
The first best practice is to make it easy for others to reach you. Provide a hotline or online reporting form and make sure everyone knows about it. Verify it is a carrier issue and not something that can be dealt with in-house. Once you have verified it is a carrier issue, contact the vendor and outline your
expectations. This helps eliminate misunderstandings; the carrier should know when you are expecting a call back or a resolution. Depending on the issue, you may want to ask to work with their technicians instead of their help desk team. Technicians will have more tools available to them to test and verify hardware, software or network connections, which translates into having the issue resolved quicker. When dealing with an emergency, the last thing you want to cause a delay is searching for a support telephone number. Documenting the contact information for each carrier will help reduce downtime. Store vendor contact information in your centralized system so that everyone on your team will know where to find this information—and keep it updated. Ask for direct contact information for technicians that your team may need to call when doing maintenance or upgrades on the network.
As wireless devices proliferate, security has moved from in-place devices like computers to mobile devices such as smartphones and tablets, which are often brought into your environment through Bring Your Own Device (BYOD) programs. The leading best practice is to follow your own published policies, that’s the only way to keep your company operating according to established standards.
Beyond policy, maintaining security is imperative, you need to move swiftly and decisively in the event of a breach. Depending on how complex your mobile network is—which includes a determination of the variety of device types, operating systems, productivity applications, data and carriers - control may be exercised through classic management tools such as BES or GOOD, or you may need to expand your investment into Mobile Device Management (MDM) or Mobile Application Management (MAM) tools. Increasingly, these tools are finding their way into corporate environments, but early adoption is more common in financial and medical business environments to conform with privacy and reporting rules.
BUSINESS
7. Strategic Sourcing
Strategic sourcing is more than just an RFP event, it’s the end-to-end process of understanding your business requirements, refining that into what you need to acquire from carriers, selecting who to buy it from, and defining the terms that the services are acquired under.
Best practice sourcing begins with giving your business plenty of time to get the job done! Once you are backed into a timebox corner, the carrier will have all of the leverage.
As with the design of a network, understanding your business and changes which lie ahead will shape your ability to present potential vendors with a clear picture of the services needed, quantities and capabilities of those services and the acquisition timeframe. Now you’re ready to address the next key area, vendor qualification. Depending on your national or regional footprint, the desired quality of service and other factors, vendors will be more or less qualified to offer the services you are requesting. Where service quality and control is critical, tier one vendors will provide the highest degree of performance, but at a price. In other cases, tier two and Reseller/Agents can help drive down price but you are dependent on the packaging of services that they pull together. In short, sometimes you MUST go with one of the large national carriers; other times you can drive significant savings by avoiding them.
It is natural to focus on price, but a winning agreement will be just as much, if not more, about the business aspects. In fact,
companies that focus heavily on terms typically wind up with better pricing, since the carriers know they are equipped to negotiate professionally.
Ensuring that the business terms are favorable requires
knowledge of carrier practices, a thorough understanding of the language as presented in any agreement, and a checklist of over 50 term elements that can improve or weaken the strength of your agreement. From a best practice perspective, each of these 9 umbrella categories should be addressed, and a contract should never be signed until you are convinced they meet your needs:
1. Term: Contracts should neither be too long nor too short. History shows that most pricing
continues as part of a 30-year pricing downward trend, so locking in fees for too long can put you at a disadvantage, while having to renegotiate too frequently can be time consuming. Best practices indicate three years as a good average, so long as the contract allows for mid-term negotiation and exit. And add language that makes an additional extended term of 3,6 or 12 months be your choice, not the carriers. This will support your move to another carrier if needed.
2. Revenue or Service Commitments: Whether measured in dollars, number of lines, or another
metric, at the very least this number should always be attainable within 9 months. Even better is a smaller MARC with carryover capability that will let you leverage excess spend for further
concessions. MARC achievement should be reported to you by the carrier regularly.
Companies that focus
heavily on terms typically
wind up with better
pricing.
3. Service Level Agreements: Carriers have an obligation to perform, and the contractual SLAs
are your means to establish the performance criteria. Make sure they are specific and measurable, and as with MARCs they should be reported regularly.
4. Ramp Periods: Don’t have your commitments begin and end on the first or last day of your
agreement. Plan to ease into or out of services as you convert vendors or technologies.
5. Technology Migration: During the term of any agreement, technology changes could cause you
to rethink your network environment. Plan for this by having contracts that allow your MARC and other factors to be adjusted based upon technology shifts within your contracted carrier. Other clauses related to term length and early renegotiation can also be used to support a migration.
6. Business Downturn: Should your company suffer a financial setback, or should you chooose to
sell off portions of your business, don’t allow your commitments to be maintained at perilously high levels. These should be adjustable based on metrics such as revenue, number of locations or others that fit your business.
7. Pricing: While many consider this the single most important element of a contract, and there is
no question that pricing matters a great deal, best practice goes beyond the service price points when generating value. Almost everything in a contract is negotiable, especially with pricing elements. Opportunities to sweeten the pot can exist with fee waivers for installations or early terminations or even “regulatory” fees such as USF.
8. Dispute, Escalation and Resolution: Unfortunately, things will go wrong, they always do. A best
practice contract must put very specific rules and processes in place for how to remedy the problems. Too often the cariers are not held accountable, they don’t need to keep track of disputes, or report on them, or meet certain timelines to resolve them. Ultimately, should the carrier underperform in this area, a company should have the right to exit the contract.
9. Exit Strategy: The contract will come to an end at some point, either through full term
completion, early MARC fulfillment, or other reason. Carrers have developed language and processes that serve their interests to retain a company’s business, a best practice approach requires the inclusion of language that gives the maximum transition flexibility.
8. Develop & Manage Policies
As networks become more complex, including more than simple voice communications, the policies that are put in place with a focus on their use becomes more critical. For example, employees hate to be away from their families. As a result, companies wind up supporting baby video cams, streaming music and other applications that require costly bandwidth. On the wireless side, a corporate-liable phone might incur a larger percentage of cost for personal use than professional. And in the process of downloading or accessing these personal files, employees may be unwittingly downloading a virus or allowing access to your secure network. Since you are responsible for ensuring that the network is running and able to handle the large volume of data, it becomes incumbent on you to deploy policies to mitigate risk and cost. Creating comprehensive guidelines that define acceptable business policies for personal activities is critical to managing telecom expenses and ensuring your company’s data security is protected. The first
best practice is to create written policies. Haphazard, undocumented policies that aren’t uniformly applied create management headaches. There are numerous policy templates available, so telecom managers should seek the policy that matches the culture and will of their organization to enforce. The second action is to have each employee sign off on the policy and make it available for review. Ultimately, enforcement will be required so it is important that your entire management team is willing to buy into supporting this aspect of the program.
9. Manage Vendor Relationships
Vendor contracts double as a powerful performance measurement and reporting tool. Best practice dictates including SLAs in your contracts, and frequently meet with the carrier to review them. Leveraging these to the fullest extent will reduce your telecom expenses and also improve your service levels. Being effective also means resolving problems as quickly as possible, and that the vendor is held accountable. To do this, a best practice of maintaining ready access to contracts that contain
performance clauses is required. As service issues arise, review the contract to determine if any carrier penalties apply. Log all issues that will allow you to spot chronic problems, which can be your ticket to reduce overall pricing, renegotiation or early contract exit.
INTEGRATED MANAGEMENT SOLUTION
Ultimately, these nine best practices are reliant upon accurate and total availability to relevant data. Most companies do not have resources, or don’t prioritize investments in building workflow and information tools. These companies find that capturing and managing all of the critical underlying data is too time-consuming for an individual enterprise. Yet making this time investment will have lasting benefits beyond controlling telecom expenses. By providing a centralized information system, a company’s teams and stakeholders will have better visibility into costs and services, thus reducing expenses and improving network performance. Following the nine best practices above will propel CIOs and IT departments into successful teams.
ABOUT ECOVA
Ecova is the total energy and sustainability management company whose sole purpose is to see more, save more and sustain more for our clients. Using insights based on consumption, cost and carbon footprint data spanning thousands of utilities, hundreds of thousands of business sites and millions of households, we provide fully managed, technology-optimized solutions for saving resources, which in turn increase returns, lower risks, and enhance reputations. Ecova is the largest non-regulated subsidiary of Avista Corp (NYSE: AVA and avistacorp.com). For more information, visit the company’s website at ecova.com, on LinkedIn at linkd.in/ecovainc, or follow Ecova on Twitter at @ecovainc.
ABOUT THE TELECOM LIFECYCLE MANAGEMENT SOLUTION
Managing a best-practice telecom network is a complex and challenging responsibility. Encompassing wireline and wireless environments, the rapid pace of device, technology and business change can be a challenge as the need for an efficient, high-performing network increases. Ecova’s Telecom Lifecycle Management offerings are specifically designed to assist our clients in providing their internal and external stakeholders with superior network management capability. We understand the diverse range of functions associated with managing a telecom environment, and with 15 years of expertise, we offer support in all areas of running your telecom network.
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