You should review your Telecom Cost
September 25, 2009
As reported in Midmarket CIO News
Tips for cutting costs on telecom spending |
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By Karen Guglielmo, Executive Editor 20 May 2009 | SearchCIO-Midmarket.com |
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Telecom spending accounts for more than half of all IT spending worldwide, according to Gartner Inc. That’s why it can be worth the time to scrutinize bills, identify areas for cost savings and shop around for new providers.
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So say consultants and CIOs with telecom experience, who offer the following tips for cutting telecom spending:
Assess your telecom inventory and audit your bills.
To effectively manage telecom spending, the first step is to find out exactly what you have and use, by analyzing your inventory and contracts. Take inventory on all lines and services; you may find that though your company has shut down offices or lost employees, you continue to be billed for those services.
“You always want to consider utilization,” said Michael McCauley, a Project Management Professional at TelPlus Communications Inc., a third-party telecom service provider. “You are paying for all these lines, but are you actually using them all?”
McCauley provides auditing and telecom expense management services to companies that want to outsource these tasks. He said that in working with customers and reviewing their telecom spending and bills, he finds that up to 30% of pricing reflected on bills is incorrect.
“Much of the time the discrepancy is something simple, like a contract pricing code not on the account,” McCauley said. Because of this, companies are often eligible for discounts and credits for overcharges.
At Mannatech Inc., a $333 million developer and provider of proprietary nutritional supplements, weight management products and skin-care solutions, CIO W. Jerome Oberlton conducts a quarterly audit on telecom billing and services in-house. “We actually do a match of our telecom inventory to our bills. It helps to manage costs,” he said.
Automate the telecom billing process.
Most companies use multiple carriers for their telecommunication services and thus receive multiple invoices. Automating telecom billing and payment can save companies money because most telecom carriers charge additional monthly fees for paper invoices. Automation can also lower the internal costs of processing each invoice and free up staffing resources in IT and accounting.
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Automated billing still gives you the opportunity to review your charges, through either a Web portal where you can access inventory and pricing information or through monthly management reports that break down charges by service/circuit type, location, carrier, etc.
Midmarket companies can either set up their own automated telecom billing process and system, or they can partner with a service provider for it.
Consider hiring a third party to manage your spending and contracts.
Third-party telecom providers like TelPlus Communications can help assess spending, automate billing and negotiate contracts on behalf of the customer. These service providers are especially helpful in contract negotiations because they’re already familiar with the telecom carriers, their offerings and where they’re most flexible for cutting costs.
Telecom service providers give companies a “one throat to choke” option for billing, according to McCauley. “Whether you’re working with 20 or 100 telecom companies, you just have one call to make,” he said. “All of your inventory is in one place, and there’s one project manager to call. That alone is a huge time and money saver.”
Renegotiate contracts.
In this economy, it’s a buyer’s market. Customers can demand the services they want or move to another vendor. So this is the right time to closely review your telecom contracts and renegotiate if needed.
Telecom carriers want all of your business, not just a piece of it, according to McCauley. And the benefits they offer for getting all of your business are higher discounts.
For instance if you have 50% of your business with AT&T and 50% with Verizon, you can include a clause in a renegotiated contract with AT&T saying that if you give the company 90% of your business, you receive a certain rate and higher discounts. This is a win-win for both you and AT&T. The telecom carrier gets your committed business and you get better service and rates.
“We’ve even seen some cases where small-to-medium businesses cancel contracts with the Bells and absorb the cancellation penalties because the savings they get with us more than offsets the switching costs,” said David Williams, vice president of product management and marketing at Covad Communications Group Inc., a national provider of integrated voice and data communications.
Another consideration in renegotiating your contracts is the addition of a “business downturn” clause. This allows the customer to renegotiate the terms of the contract if there is a downturn in its business — such as losing a major client or closing multiple offices.
Don’t overpay for wireless — shop around and consider new converged network technologies.
Wireless is a huge area of misuse and a big area for savings.
“Wireless can be a huge money pit,” McCauley said. “Customers are often put on incorrect plans and are overpaying for services.”
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There are many ways to save with telecom wireless and data services. One is to move to other types of data networks or new technologies, such as Multiprotocol Label Switching, which can typically carry data and voice traffic at lower costs, or Session Initiation Protocol, which customers can employ to consolidate local voice, long distance and data services onto one network.
Oberlton recently renegotiated his mobile contracts. He switched vendors to gain cost savings.
“By moving from one vendor to another, we got rid of some servers on-site,” he said. “This helped get costs down and receive more volume discounts.”
Oberlton did caution others, however, to beware of penalty clauses for switching vendors, which some telecom wireless carriers are including in contracts. These clauses come with steep fees and should be addressed early in the contract negotiation process, he said.
Our Perspective:
When was the last time you took the time to review your current telecom cost and provider? We find that many companies fail to look at these cost. They know what their monthly cost are and they budget that cost for the future.
Don’t get caught up in this fallacy. There are great opportunity for savings by shopping your current cost. Our clients are finding from 15% upto 40% savings. What would this mean for your company?
Would you like to know more? Call us @ 856-857-1230 or email us and ask about our free evaluation george@hbsadvantage.com
2009 Electricity Prices Plummet
September 25, 2009
By REBECCA SMITH as reported in Wall Street Journal
Slack demand for electricity across the U.S. is leading to some of the sharpest reductions in power prices in recent years, offering a break for consumers and businesses who just a year ago were getting crunched by massive electricity bills.
On Friday, the nation’s largest wholesale power market serving parts of 13 states east of the Rockies is expected to report that electricity demand fell 4.4% in the first half of the year. That helped to push down spot market prices by 40% during the first half of this year.
![[Electricity Prices Plummet]](https://i0.wp.com/s.wsj.net/public/resources/images/P1-AR100_POWER__NS_20090811190011.gif)
Wholesale electricity — power furnished to utilities and other big energy users — cost an average of $40 a megawatt hour in the region, down from $66.40 a year earlier. The price declines in this market, which extends from Delaware to Michigan, come on top of a 2.7% drop in energy use in 2008 over 2007.
The falloff in demand represents a reversal of what has been one of the steadiest trends in business. For decades, the utility sector could rely on a gradual increase in electricity demand. In 45 of the past 58 years, year-over-year growth exceeded 2%. In fact, there only have been five years since 1950 in which electricity demand has dropped in absolute terms.
But this year is shaping up to have the sharpest falloff in more than half a century, and coming on top of declines in 2008, could be the first period of consecutive annual declines since at least 1950.
Dramatic price reductions don’t immediately mean lower power bills for all consumers. That’s because many customers pay prices based on long-term contracts. But lower prices will have a softening effect over time.
In California and Texas, a combination of cheap natural gas and lower industrial demand is putting pressure on prices.
In the Houston pricing zone, which has many power-gobbling refineries and chemical plants, the spot market price was $61.82 in June, versus $129.48 a megawatt hour a year earlier. Power demand in Texas is down 3.2% so far this year due to business contraction and reductions in employment which are causing many households to economize.
Just a year ago, many businesses and residential customers were reeling from electricity prices on the spot market that had spiked to historic highs, driven by high fuel prices and hot summer weather. Some businesses curtailed their operations because electricity and natural gas were too pricey.
![[Electricity Prices Plummet]](https://i0.wp.com/s.wsj.net/public/resources/images/P1-AR099A_POWER_NS_20090811181355.gif)
But the flagging economy has resulted in a slump in demand that has jolted some energy markets. American Electric Power Co. and Southern Co., for example, both reported double-digit drops in industrial electricity use for the past quarter.
Meanwhile, natural gas, which strongly influences electricity prices, has fallen below $4 per million BTUs, or British thermal units. That’s down from $12 at last year’s peak.
For many businesses, the cost of electricity represents one of the few bright spots in a dismal economy. Andy Morgan, president of Pickard China Inc. in Antioch, Ill., which makes fine china, figures his electricity cost is down 30% to 40%.
Last year, when everything was spiking, he looked at different options — including negotiating a fixed-price contract for energy with a supplier. He says he held off and now he’s happy he did.
“We’ve definitely reaped savings,” says Mr. Morgan, adding that “especially in a down economy, you’ll take whatever you can get. That’s one of the few blessings during this storm.”
Slowdowns at major industrial companies such as Alcoa Inc. help account for the decline in electricity usage this year. The recession and drop in consumer demand for products that contain aluminum has caused the company to idle 20% of its smelting capacity world-wide this year.
In the U.S. the company has cut production at smelters, which are traditionally big energy users, in New York, Tennessee and Texas. Kevin Lowery, a company spokesman, said he did not believe that Alcoa has saved much money thus far because the company primarily purchases electricity through 25- to 35-year contracts.
Steel Dynamics Inc. is benefiting from lower pricing. The company operates five steel mills, with four purchasing electricity at spot market prices in Indiana, Virginia and West Virginia. The benefit, though, is smaller than it might be because the steelmaker is producing less steel this year.
“We’re producing fewer tons, but every ton we produce we seek to minimize the costs and electricity is one of those,” said Fred Warner, a company spokesman. Its mills are running at 50% capacity this year, down from 85% capacity last year.
Some wonder whether the deregulated markets of the Eastern U.S., Midwest, Texas and California will be especially hard hit if demand comes roaring back. That’s because utilities in these markets no longer are required to build new resources. It’s left up to the power generators to determine when the market conditions are ripe.
“There’s more supply than demand and prices are really low so it doesn’t make sense to build anything,” says John Shelk, president of the Electric Power Supply Association in Washington, D.C., a group that represents power generators.
Many electricity markets throughout the country have implemented demand reduction programs that give consumers a further incentive to reduce power use. The 13-state PJM Interconnection market has been one of the most aggressive — and has seen one of the steepest price drops.
A new report from the region’s official market monitor found a strong correlation between falling prices and an increase in demand-reduction programs. In the PJM market, energy users can collect money through an auction process for pledging to cut energy use in future periods.
In May, PJM conducted an auction to ensure it will have the resources it believes it will need in 2012-13. About 6% of the winning bids came from those who pledged to cut energy use by a total of 8,000 megawatts in that future period.
Our Perspective:
For those companies faced ith rising utility prices over the past 4 years, there is finally relief in the deregulated market. Prices have fallen due to the decrease in demand.
If you look at you electric bill over the past 12 months you will see that your price to compare for electric supply was most likely over .12 cents per kWh. Current market rates will allow you to lock you supply price in the dregulated market somewhere in the .10+ cent per kWh area. This could provide a 11/2 to 2 cents per kwh savings over the next year or two.
Our clients are finding substantial savings which fall to the bottomline.
Would you like to know more? Give us a call 856-857-1230 or email george@hbsadvantage.com . Contact us for a free evaluation You will be surprised by the savings it will provide.
—Timothy Aeppel, Sharon Terlep and Kris Maher contributed to this article.
Sagging Energy Rates Creates An Opportunity for Power Purchasers
September 18, 2009
Real-Time Pricing: Now is the Time. From the September 2009 issue of Building Operating Management magazine. The facililities management resource.
Our Perspective:
Below you will find a great article providing the savings opportunity in the deregulated gas and electric market.
It is true we are finding substantial savings for our clients. Energy Prices are the lowest they have been in the last 3 to 4 years. Our clients are saving from 10% upto 25% over what they paid over the last 12 months on gas and electric supply cost.
Based on annual usage, we have seen small clients saving a couple of thousand dollars over the next year, to our larger clients saving from $90,000 upto $300,000 over the next year.
What would be the potential savings for your company?
All you have to do is ask. There are no fees involved, the savings fall to the bottom line.
Should you like to know more about the utility savings available for your company call 856-857-1230 or send an email to george@hbsadvantage.com
Enjoy the article, click on the link provided below.
via Sagging Energy Rates Creates An Opportunity for Power Purchasers.
Google’s Custom Solar Technology Will Reduce Costs by 60%
September 11, 2009
by Jerry James Stone, San Francisco, CA
on 09.10.09
Google’s developing new solar tech that will drop the cost from 18 cents a kW-h to just under 5. At least, it’s hoping to.
Just like everybody else, Google’s disappointed by the industry’s lack of innovation so they’ve decided just to do it themselves. At least that’s what Google’s Bill Weihl said today at the Global Climate and Alternative Energy Summit hosted by Reuter’s right here in San Francisco.
Not too surprising. Google builds its own servers since commercial servers are too expensive. The company makes cheap janky ones and just lets its homegrown software handle the outages.
Google engineers have primarily been focused on solar thermal technology. Weihl hopes they can cut the cost of making heliostats by at least a factor of two, but “ideally a factor of three or four.”
“We’ve been looking at very unusual materials for the mirrors both for the reflective surface as well as the substrate that the mirror is mounted on,” said Weihl.
The search engine giant started investing in renewable energy back in 2007. Along with solar thermal tech, the company is also interested in gas turbines that could run on solar power rather than natural gas–a name change might be in order.
Whatever the technology turns out to be, their main interest is the cost. They want to create a renewable energy that has a lower price point than coal. In doing so, they have invested about $50 million in the industry so far.
“Typically what we’re seeing is $2.50 to $4 a watt (for) capital cost,” Weihl said. “So a 250 megawatt installation would be $600 million to a $1 billion. It’s a lot of money.”
Google hopes to showcase the technology within a few months. It must first sustain accelerated testing to show its resistance to decades of harsh desert conditions.
One thing’s for sure…I look forward to seeing what they’ll come up with.
Unemployment Rises to 9.7 Percent; 216,000 Jobs Lost in August
September 4, 2009
Washington Post Staff Writer
Friday, September 4, 2009; 9:27 AM
The job market continued its long, steep decline in August, with the jobless rate soaring to 9.7 percent and employers continuing to shed jobs, albeit at a slower rate than expected.
Analysts generally believe that economic output began rising by late summer. But new Labor Department data released Friday morning shows that that improvement isn’t yet flowing through to the job market, as employers remain highly reluctant to add staff.
The rise in the unemployment rate rose to 9.7 percent in August, from 9.4 percent in July, resumed a steep upward path that has been only rarely interrupted since the recession began in December 2007. Employers shed 216,000 net jobs, significantly better than the revised 276,000 jobs lost in July and less than the 230,000 decline that forecasters expected.
The tally now stands at 6.9 million jobs lost since the beginning of the recession in December 2007. A broader measure of joblessness rose even more sharply than the headline unemployment rate. An expanded unemployment rate that includes people who have given up looking for a job out of frustration and who are working part time but want a full-time job rose to 16.8 percent, from 16.3 percent.
The rate of job losses has been declining, if haltingly, since winter. The August numbers, bad as they are, do offer hope that job losses will continue tapering off. Economists generally consider the job loss numbers to be a more reliable month-to-month barometer of the economy than the unemployment rate, and that measure indicated the slowest rate of job loss since August 2008.
The report also said that the average workweek was unchanged at 33.1 hours. Employers have cut back on hours in the current downturn, in addition to cutting jobs entirely, and are expected to have existing employees work longer hours before bringing new people onto their staffs. The hours-worked number confirms that employers have stopped cutting back hours but gives no evidence they are starting to expand hours yet.
Among the most positive signs in the report, average earnings for non-managerial workers rose 0.3 percent in August, the Labor Department said.
The job losses, though lower than in recent months, remained broad-based. The construction industry cut 65,000 jobs, in line with the recent trend. Manufacturing companies cut 63,000 jobs. The health-care sector, as it has throughout the recession, added jobs.
Searching for Savings? Examine Your Telecom Network
September 4, 2009
Aug 3, 2009 9:58:56 AM
Lora Bentley spoke with Julie Dillenbeck, marketing VP at Global Capacity, a telecommunications information and logistics company that helps businesses increase efficiency with supply chain issues for access networks globally. She points out that a lot of money can be saved by optimizing one’s telecom network and pricing.
Bentley: Global Capacity deals with telecom logistics. Can you explain what that involves?
Dillenbeck: The telecom market is a very complex one, with thousands of suppliers around the world, and none of them have a footprint that covers the entire world. So when people are looking at telecommunications, oftentimes they have to piece things together. So if we were to do a connection from New York in the United States to London, or Italy, or France, you’d have to figure out which of the carriers can get between the countries and then who can get to “the last mile,” so to speak. Because we’ve been collecting that information from carriers for years, we already know where their networks are and who they interconnect with.
Bentley: Saving money is important all the time, but I’m assuming it’s higher up the priority list in this economy. So how do you go about helping customers “optimize” their networks? What does that look like?
Dillenbeck: Well, the customer will come to us and say, “Ok, I have these networks I’ve built in these 32 countries. Tell me if there’s a better way to do it.” There are a lot of different ways to look at that.
The first one is to look at inventory and match it up with the invoices that come in from the different carriers. It’s similar to what telecom expense management companies do, but we take it a step further. We’ll say, “Why does your invoice say $120 when you’ve contracted for $100?” and we’ll investigate that. We also validate that they’re getting charged for the right mileage, and if they’re buying a tariff service, that they’re on the right tariff.
Bentley: OK, and others?
Dillenbeck: Then, there is what we call a financial grooming. Let’s say they have 100 circuits, and 50 of them are going between the same locations. At that point, we’re looking at aggregation. We can help the customer go back to the vendor and say, “We have these 50 circuits here. It makes a lot more sense to go with an OC3 instead of the T1s.” It saves money and it allows the customer to have spare capacity.
The last piece is physical grooming. We’ll take a look at their network and say, “This is great, but there are opportunities for aggregation, or there’s an opportunity to actually move to a new carrier and provide you savings.”
Bentley: So they have to physically move their networks.
Dillenbeck: Right. Obviously, not a lot of customers want to do that because they don’t want to disrupt their end users, but there are those who are anxious to do that just for the savings…. We worked with a customer who was spending $3 million to $4 million a month just because of the way they had built their networks. Now their spend is in the hundreds of thousands instead, so it’s a significant savings.
Our Perspective:
This is a great article. We find market opportunities for our clients daily.
Many companies are hesitant to look at there voice and data providers for they are afraid to cause any disruption. They wear their services like a security blanket.
You hear them say, ” We’re with Verizon or ATT.” Just think for a moment, what type of personal service do they offer. When is the last time you called Verizon or ATT and spoke to the same person two times in a row?
The market has evolved so much in the last few years. Personal service is important! Communication between provider and the client is essential!
We represent over 50 of the major providers in the voice and data market. This allows us to evaluate your needs. find the right providers that will provide savings and service your needs.
Personal service is essential and can be found at Hutchinson Business Solutions.
Would you like to know more email george@hbsadvantage.com
You may visit us on the web www.hutchinsonbusinesssolutions.com
New Jersey Unemployment Insurance Benefits
September 3, 2009
Introduction to New Jersey Unemployment Insurance |
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New Jersey unemployment benefits provide temporary compensation to those workers meeting the eligibility requirements of New Jersey law. The New Jersey Department of Labor and Workforce Development and each other state’s unemployment office administers its own unemployment insurance program within Federal guidelines. |
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The value of unemployment benefits in New Jersey differs from that of other states because each state unemployment office applies its own formulas and limits when calculating the level of unemployment compensation. |
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The duration of unemployment benefits in New Jersey may also differ from that of other states. |
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You can compare state unemployment insurance programs, including eligibility, benefit amounts, and duration here. |
Eligibility for New Jersey Unemployment Benefits |
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The basic requirements for collecting unemployment are: |
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For complete details see the Unemployment Insurance section of the New Jersey Department of Labor and Workforce Development website. Or you can call the State of New Jersey Unemployment Insurance Claim for unemployment related questions from the number listed below. |
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1-888-795-6672 |
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Eligibility for Unemployment Benefits in Other States |
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If you have recently worked or resided in states other than New Jersey, you may need to choose the state in which you file your claim. Compare benefits here, and visit the other state unemployment information pages by clicking on the state’s name below. |
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Filing for Unemployment in New Jersey |
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Here are some tips for filing a correct and complete unemployment claim: |
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About Your Unemployment Benefit Check |
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How much? In general, unemployment benefits are based on an individual’s earnings in the base period. As of December, 2008, NJ benefits ranged from $85 to $560. New Jersey state unemployment benefits are subject to Federal income taxes, and you may elect to have taxes withheld from your unemployment check. |
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How soon? Across the United States, it generally takes two to three weeks to receive your first benefit check after you file your claim. Check with your state unemployment office for details. |
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How long? As of December, 2008, The duration of NJ unemployment benefits was 1-26 weeks, but benefits can be extended by New Jersey during times of high unemployment or other special circumstances. |
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New Jersey Unemployment Rate Statistics |
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How bad is it out there? Where is the grass greener? The US Bureau of Labor Statistics compiles official national, state, county, and metropolitan area unemployment statistics. To compare the unemployment rate between locations, click one of the links below. |
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