Telecoms remain in the top three business expenses

Billing invoices favour providers over enterprise two to one

"Benchmarking is absolutely essential. Compare telco costs against peers and competitors of similar size, telecom use and infrastructure to assess cost differences, and benchmark departments for efficiency," Chaisatien said, noting contracts can often bump up costs beyond agreed values.

While recommending to obtain multiple quotes is stating the obvious, Budde said they must be based on specific telecommunication bills over the last six months.

He said this helps business to avoid seemingly attractive offers such as bundled mobile, PSTN and broadband which can be traps for some.

"While most companies are better bundling their requirements (mobile, PSTN, broadband and so on) because of benefits like reduced vendor management and tariff discounts, those companies having difficulty should look at the total use and commitment rather than individual deals," Budde said.

Gartner analysts Katja Rudd and Leif-Olof Wallin outlined the value in creating a dedicated team comprised of IT, HR, legal and finance to manage contract negotiations in the Top 10 Tips for Negotiating Voice Contracts report, commissioned in 2006.

Rudd and Wallin assert that a "single point of responsibility makes it easier to negotiate contracts and to establish a status of the current position in terms of total fixed and mobile spending, user patterns, and trends".

They said the team should be responsible for managing the entire contract negotiation process; from obtaining the initial status, through to the assessment of requirements, and the evaluation and selection of a service provider.

The team should also be responsible for fixed and mobile voice usage, according to Rudd and Wallin who said it will allow business to establish the focus for future negotiations.

In his study entitled, What Businesses Should Negotiate and Expect in Carrier Contracts, Chamberlin said enterprises should establish a set of contract priorities to structure negotiations.

"The enterprise should decide which changes are nice to have, which changes they would strongly like to have, and which changes are 'deal breakers'," he said.

"If there are more than one or two deal breakers, the enterprise should re-evaluate them. Similarly, within each clause, the enterprise should determine what its best case is and what its minimum requirements are."

Gartner vice president and research director Geoff Johnson recommended businesses scrutinize billing invoices as financial errors can favor carriers over enterprises two to one

"The net outcome of records being out of date is that unused lines and billing errors usually favour carriers rather than user organizations," he said adding that audits can easily milk five percent to eight percent simply by resolving errors.

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