UK firms wasting £1bn in telecoms 'black hole'

More than 75 per cent of UK firms do not have a corporate telecoms policy

UK companies are pouring more than £1bn annually down a "black hole" by not controlling the cost of communications, it was claimed today.

Telecoms expense management firm Aurora Kendrick James said that more than 75 per cent of UK firms do not have a corporate telecoms policy to measure, manage and control usage.

From old and redundant mobile phones, to poor tariff selection and incorrect invoices, companies are wasting money every second an employee is on the phone, according to the report.

Analyst firm Yankee Group said recently that enterprise telecoms spending in the UK reached £5bn in 2006.

Aurora Kendrick James claimed that UK businesses could save a collective £1bn by taking control of communications with a formal expense management policy.

With so many telecoms services on offer, from traditional fixed-line to mobile, VoIP and Wi-Fi, businesses are not paying specific attention to the services they buy versus the actual services they need, according to Aurora Kendrick James.

The firm advised businesses to clearly define telecoms usage, procurement and management in a formal telecoms policy as the first step in regaining control of spiralling costs.

Such a telecoms expense management policy should address the following:

• Check Invoices - regularly validate supplier charges against contracted rates, especially when ordering new services
• Manage Usage - create sensible guidelines for how employees should use their phones and proactively monitor all usage
• Supplier and Contract Management - maintain an accurate log of all telecoms contracts and negotiate regular benchmarking and price review clauses
• Inventory and Estate Management - create and manage an accurate inventory of your telecoms estate
• Telecoms Expense Management Reporting - generate and distribute accurate and informative management information to users and managers and constantly reinforce usage policies

"Implementing a telecoms policy will educate users, and the majority of people will stick to guidelines if they are sensible and well explained," said Matt Atkinson, managing director at Aurora Kendrick James.

"However, this process must be continuous and not ad hoc. Providing users with their mobile usage statement, and reinforcing the policy on usage, can drive out most significant misuse and excess costs.

"A lack of insight into costs in your organisation will almost certainly mean that you are overpaying for telecoms services and missing out on significant cost savings that could be achieved without changing your suppliers.

"Once you have established greater control of these costs your organisation will be able to tackle areas like redundant services, call abuse and fraud."