Ensuring Maximum ROI from a Success Fee-based Telecommunications Audit

Transcription

1 WHITE PAPER Ensuring Maximum ROI from a Success Fee-based Telecommunications Audit This White Paper explains what a Telecommunications Audit is and what results an enterprise should expect from a successful Telecommunications Audit. It also explains what a Success Fee-based Telecommunications Audit is and provides specific tips to help an enterprise maximize its ROI.

2 Contents Overview... 3! What is a telecommunications audit?... 4! What are the keys to a successful telecommunications audit?... 4! What are the deliverables of a telecommunications audit?... 4! What are the results of a telecommunications audit?... 5! What is a success fee based audit?... 6! How can enterprises maximize the ROI of a success fee-based audit?... 6! About Permission Based Audit sm (PBA)... 7! About WidePoint Corporation... 8! WidePoint Corporation 2

3 Overview Many enterprises conduct an internal review of telecommunications expense and infrastructure such as voice and data services, Internet access, and wireless rate plans and features. Following these reviews, organizations have a level of comfort surrounding their telecommunications-related billings and contracts. Should they? Telecommunications services and pricing is a dynamic environment on both the carrier and the consumer sides. Carrier service offerings vary and evolve. New offerings displace existing ones and establish new price points. Contracting practices evolve in the face of the market and the skills and knowledge of the negotiating parties. Yesterday s best deal can become much less desirable long before contract expiration. Vendors roll over contracts, giving the consumer a slightly better deal, but never the best deal. What strategies can you develop to deal with this? Telecommunications contracts, ordering processes, and billings are complex. Assuring that contracts are enforced with the carrier and used properly by the consumer is a serious challenge. There are frequent failures leading to improperly implemented contracts, billing errors, and consumption of services that can be more costly than either expected or necessary. How do you know where you stand? Carrier bills have up to a 7% error rate. An audit can generate savings between 5% and 40% of annual telecom spend Ordering of services may be based upon perceived need and limited knowledge of best practices. When an order is placed in your organization, does it answer the questions needed to rationalize service: Is it the best service for the application? What is the correct quantity of service? Who is the best vendor? What s the right price? Does your organization use these tests or look backward at prior orders and evaluate them based on these fundamental questions? Tracking inventory and assuring continuing need is an endless challenge. Wireline services are ordered when needed, but often left in place even when the need is no longer there. Removal of services from facilities may be overlooked or the orders not worked by carriers while you continue to pay for them. Wireless service can be especially challenging with employee turnover, upgrading or downgrading of devices, inability to validate users against invoices, payment for extra services that are not needed or contrary to policy, and more. Choosing plans, optimizing them, and maintaining results over time is a great challenge. How do you regulate and optimize your wireline and wireless inventory and expense? Processing monthly telecommunications invoices is costly. Some costs are visible, others are less apparent. Simply processing an invoice for payment can cost $5 to $20 or more. That only applies if the invoice is correct. What is the cost of processing an incorrect invoice? Sometimes it s thousands of dollars. How do you validate your invoices at the lowest level of detail, the Universal Service Order Code (USOC) and compare it to tariffs or contracts and balance your customer service record? A comprehensive telecommunications analysis and forensic audit, performed by an objective third-party auditing firm whose specialists are independent from telecom carriers, can result in historical recovery and actionable future savings recommendations valued at 5% to 40% of the annual telecommunications expense. WidePoint Corporation 3

4 What is a telecommunications audit? A telecommunications audit is a forensic investigation in which trained specialists follow a proven methodology to gather detailed contract, invoice, and inventory information from many sources within and outside of the enterprise. The auditor analyzes this information and turns it into documentation that can be submitted to the carrier(s) to quickly obtain refunds for historic overbillings resulting from numerous causes. Auditors also utilize their findings to produce recommendations for cost-reduction measures that result in on-going savings. What are the keys to a successful telecommunications audit? The key to a successful audit is a bullet proof process that includes gathering complete information and uncompromising attention to detail. Contract terms and conditions including rates, incentives, promotions, and commitments that are analyzed o Invoice rates are compared to contracts and tariffs for conformance o Contract rates are benchmarked against market rates Inventory and invoice detail are compared to identify any differences o Nonexistent, billed services are found and removed o Unneeded services are identified o Incorrect billings are documented Carrier invoices are audited to the USOC level Long distance invoices to the call level Network invoices to the component level Wireless invoices to the underlying line item detail What are the deliverables of a telecommunications audit? A professional telecommunications audit results in three broad deliverables: Audit recoveries o Inventory of audited services o Documentation o Billing errors and recoveries Cost reduction recommendations o Service reductions and rearrangements o Service alternatives o Rate and contract negotiation Best practice review Answering the Why Question o Service optimization o Traffic studies and sizing o Technology assessment and strategies o Consumption management WidePoint Corporation 4

5 What are the results of a telecommunications audit? First, a great audit results in a baseline inventory of wireline expenses and service applications and wireless devices with underlying detail. This is often the first comprehensive inventory available to executives. Second, a great audit results recoveries from carriers. Refunds are received promptly when the auditor fully documents the issues and presents to the carrier the theory of the billing error and documentation supporting that theory. Great audits uncover issues that are difficult or laborious to detect for the average auditor. Third, a great audit identifies forward savings opportunities. It tests services for need and applies rationalization techniques such as traffic studies, competitive services review or wireless policy and wireless rate plan and feature optimization. Fourth, a great audit provides you with visibility into and control over the process. There is clear, regular reporting on the status of the project, well documented findings, and recommendations that you receive and approve before action is taken and continuing results reporting. Fifth, a great audit delivers implementation management and quality assurance. The auditor manages implementation of approved findings and recommendations, tests the results with a quality assurance process, ensures refunds have been received, errors corrected, and cost reductions implemented, and provides documentation that clearly supports the reported results. The results of telecommunications audit recoveries and cost reduction vary widely but generally can deliver: Recoveries of 5% to 10% of wireline spend, with 15% to 25% possible Cost reduction of 3% to 15% of wireline spend Wireless cost reduction of 15% to 30% of spend Audit Process & Results Contracts Audit Recoveries Invoices Voice Long Distance Data Internet Wireless Cost Reduction Recommendations Best Practices Review Wireline & Wireless Spend Recovery Future Cost Reduction WidePoint Corporation 5

6 What is a success fee-based audit? A Success Fee-based audit is a professional services engagement where the auditor is paid from proven results. There are no up-front fees so there is no risk to the enterprise. The audit firm does not get paid until it produces documented savings or refunds for the enterprise. In general, Success Fees do not exceed 50% of refunds received or actual saving achieved over 12 months as the result of accepted and implemented recommendations. How can enterprises maximize the ROI of a success fee-based audit? The most successful audits are a partnership focused on the best interests of the enterprise. The enterprise wants to know that it has not overpaid on its bills, it has what it needs and it is not overpaying for service. The auditor gets paid by delivering those answers. The partnership means establishing a project that has managers at the enterprise and at the audit firm. The partners respect each others time and focus on the prompt delivery of access and information from the enterprise and audit, analysis, recommendations and implementation by the auditor. There should be a proven project plan with identified tasks, assigned responsibilities and clear delivery dates. This should be supported by regular project meetings to assure that information flows properly and such issues as may arise in the course of the audit, or with vendors, are cooperatively and quickly resolved. A well structured, tightly managed and cooperative project shortens the enterprise s time to money and maximizes results. First returns can occur in 30 to 45 days from commencement of work. The audit must address savings maintenance. For recoveries, it means verifying the refund was received, the correction was made and the error does not recur. For cost reduction, it means monthly validation of actual savings each month over the period the Success Fee is billed and that additional savings opportunities are identified and implemented when appropriate. Such upgrading of recommendations may occur in a wireless audit as the result of ongoing optimization or changes in the market. For wireline services it may occur with market changes such as offerings that displace existing services and lower cost. The next step for the enterprise is addressing the ongoing issue of maintaining accurate billing and containing or reducing cost. An old issue is the accuracy of complex wireline service invoices. A much more pressing issue is the evolutionary demands made on cost and support by the explosive growth and high churn rate of wireless services and applications. Aberdeen Group s Best in Class enterprises maximize the results of a Telecommunications Audit by performing ongoing, monthly Telecom Expense Management (TEM). Telecom Expense Management (TEM) involves more than auditing. TEM is a lifecycle management approach to policy, procurement, invoice and expense management, wireless rate plan, feature and device optimization and reporting that improves visibility into the nature of expense and provides business intelligence for metrics based decisions. WidePoint Corporation 6

7 In addition to professional staff, qualified TEM firms have online policy and procurement portals that automate the procurement process for end users. These portals are fully integrated with expense and inventory management tools and software that automate invoice processing, invoice validation, rate plan optimization, dispute management, cost allocation and comprehensive reporting. Utilizing a TEM firm to provide service management and expense management delivers a higher ROI on the initial investment of a Success Fee-based Telecommunications Audit. About Permission Based Audit SM (PBA) Permission Based Audit SM ( PBA ) is the comprehensive cost recovery, cost reduction and contract negotiation service offered by WidePoint Corp. It is based on what was in 1973 a revolutionary approach to audits, charging for audits and the relationship of the client to the audit. We changed the audit world by legitimatizing telecom auditing and creating a fair and rational structure for success fees. Moreover, those fees were fully documented and charged over time as customers realized recoveries and documented savings. As a result, a practice of excellence was established that led to our selection as the audit and consulting partner of many enterprises. They include: State Technology Agency: $2,004, in savings o Carrier usage recovery - $1,380, o USOC audit recovery $198, o Non-Bell usage recovery - $425, Major Healthcare products provider o Historic recovery - $487, o Reduction of ongoing cost - $673, North American Division of an International Hi-Tech Manufacture o Historic recovery - $1,250,000 o Reduction of ongoing cost - $2,105,000 Major Personal Care Products Manufacturer o Historic recovery - $75,200 o Reduction of ongoing cost - $594,644 WidePoint s PBA is no risk it has saved commercial and government enterprises millions of dollars in historic recoveries and ongoing cost reduction WidePoint Corporation 7

8 About WidePoint Corporation WidePoint is an IT specialist providing telecommunications management and cybersecurity solutions utilizing its advanced information technology products and services. WidePoint has several wholly owned subsidiaries holding major government and commercial contracts. WidePoint enables enterprises and agencies to deploy fully compliant IT services in accordance with government-mandated regulations and advanced system requirements. For more information, please visit us at WidePoint Corporation 8