Businesses are
spending more on cellular services than ever before. Are they getting slammed?
In
one of the more memorable episodes of the "Brady Bunch" — and
really, how often do we get to use that opening? — parents Mike and Carol are
shocked when they see how big their monthly phone bill is getting. The solution?
They install a pay phone in the family room, forcing the kids to deposit a dime
when they place a call to classmates, coaches, and Child Services.
Harsh,
yes, but a few corporate controllers might vote for a similar approach. The fact
is, business spending on telephone services — and specifically, business
spending on wireless telephone services — is mounting dramatically. According
to industry-analyst firm Yankee Group, U.S. businesses now spend a quarter of
their telecommunications budgets on wireless offerings. All told, that works out
to about $33 billion.
Granted,
this hefty phone bill is due in large measure to the ever-increasing corporate
reliance on wireless devices. These days, you'd be hard-pressed to find an
executive or salesperson who doesn't carry a company-provided cell phone or
BlackBerry. In fact, many CEOs seem to think that sky-high cell phone bills mean
sales staff are diligently calling prospective customers.
They could be calling Movie
Phone for all anybody knows — few companies analyze the wireless spending
habits of their employees. In fact, Yankee Group reckons that barely half the
large businesses in the United States manage their cellular accounts centrally.
For the rest, bills are usually handled by a welter of departments, functions,
and business units. Moreover, employees typically lump in their bills with the
rest of their monthly expenses.
That's a big blind spot,
one that has some companies paying way too much for their wireless service. Take
Getronics, an information and communication technology specialist with about
22,000 employees worldwide. More than 2,200 of the company's North American
sales personnel have cellular phones.
Until two years ago, the
company's management couldn't get a handle on what it was paying for those
phones. "It was very difficult, if not impossible, to obtain correct
management information on our mobile telephony," recalls Romolo Pallini,
Getronics's director of networks, Internet technologies, and telecom. "Some
of the bills were paid centrally. Some employees put in expense reports each
month. It was a total mess."
In the Roaming
Faced with similar problems, some companies have demanded that their wireless
vendors provide audits of cell phone usage. That way, controllers can see which
workers are running up unusually big tabs. The usual suspects: employees who
rack up big roaming charges or exceed their plan minutes.
But experts note that
companies often use several cellular carriers, leaving finance managers to deal
with a fistful of lengthy audits each month. Desperate for a less-cluttered view
of cell phone spending, some business managers are turning to phone-audit
software. The programs, which aggregate calling data and analyze cellular
trends, are available from a number of vendors, including Traq-wireless, based
in Austin, Tex.; Framingham, Mass.-based AnchorPoint; MSS Group, based in
Denver; and TelSoft Solutions, in Glendale, Calif.
The audit software, among
other things, examines the call-detail records for all wireless phones and
predicts future usage — including roaming and long-distance charges. Brick
Thompson, interim CEO of MSS Group, claims the company's customers typically
save about 22 percent on their cellular costs using MSS's audit software.
Vendor hype? Not
necessarily. Industry experts point out that, with wireless-number portability,
it's now much easier for business users to change cell providers. The providers
know it, too. Keen to hold on to existing customers, they're more willing than
ever to renegotiate terms, even midcontract. "The carriers have to spend
$400 to $450 for each new customer," explains Charles Mahla, a senior
economist with research firm Econ One, based in Los Angeles. "They'll do
all sorts of things to keep you once they have you."
Pallini, for example,
performed an audit of Getronics's wireless spending using Traq-wireless's
software program. He found that the company was spending 22 cents to 25 cents
per minute, mostly because employees were exceeding their plan minutes. Pallini
took the data and used it to wrangle better rates from the company's many
carriers. He also began adjusting the calling plans of nearly every cell phone
user in the company. Now, Getronics's per-minute spend on wireless service
hovers between 12 cents and 15 cents per minute — about half of what the
company was previously paying.
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