The Cost of Doing Business

Most people I talk to

 

Admit to budgeting by….

 

 

How much did we spend last year?

 

 

How do you know what you spent last year;

 

Was the correct amount?

 

 

It may be a comfort level amount

 

 

In today’s growing market

 

It is good to look at all your costs…

 

 

Do not take what you paid last year

 

As the cost of doing business.

 

 

 

Just think…

 

The iphone was invented 9 years ago

 

Look how it has revolutionized how we do business

 

 

Businesses were once paying over $1000 a month for T1’s

 

You can now get 10 times the speed for a fraction of the cost

 

 

Cloud technology is transforming business…

 

 

Natural gas prices were once over $10 a dekatherm

 

We now have a new floor and….

 

Companies are saving thousands of $$$

 

In the deregulated gas and electric market

 

 

 

Did you know that NJ and PA have over a 12% error rate

 

In the payment of unemployment claims

 

The state is taking money out of your account

 

Without asking.

 

 

 

When property values went down

 

How come we continued to pay the same property taxes?

 

 

 

Is sales tax really the cost of doing business…

 

What is this real property exemption?

 

 

 

These are questions we all should be asking ourselves…

 

 

These are questions we deal with…

 

Everyday

 

 

 

 

Don’t just settle and accept that

 

What we are currently paying

 

Is the cost of doing business…

 

 

 

At HBS

 

We validate what you are currently paying and

 

Look for opportunities to save you money

 

 

We are experts in providing smart solutions

 

That will grow your bottom line.

Data Up

I remember the good old days

Back in early 90’s

The internet was new

Everyone was trying to get online

And we were all using…..

Dial up

Honey…

I just dialed up the internet

I am going to run to the hardware store

We should be connected….

By the time I get back

Yawn…….

After tolerating the dial up

For several years

The phone company

Came up with a new way

Of delivering the internet over copper

Welcome to the world of DSL

A big small step forward

Is there anyone out there still using DSL?

As we continued to thirst for

Faster access to information

Fiber was introduced

While copper was like driving down

A one lane road

Fiber was like driving on

A 24 lane highway

However;

As access to information

Was getting faster and faster

The cost was getting

Higher and higher

Deregulation was introduced

To bring competition to the field

Competition was designed to control prices

For a time

This apparently was not happening

What should we be looking at…

When we are buying access to information

Do we look for the lowest price?

Do we pay the higher price?

Is more better?

Are all speeds the same?

Should I want a faster download speed?

Or

Faster upload speed?

These are all questions everyone should be asking

We find

That many people are not asking these questions

Advertising is designed to

Spark an interest

Make people call

Get customers in the door

But as we know

Cheaper is not always better

You have to understand

What are your needs

There is no one size fits all solution

At HBS we listen

We evaluate what you are currently doing

Determine how to deliver

What you want

Designed to meet your needs

Several years back

Businesses were paying over $1000 a month

For fast data access

Slowly the prices began to come down

As competition entered the field

But companies were still paying

$600 – $700 a month for fiber

Enter…..

Comcast and Fios

You say Tomatoe ….

I say Tamatoe….

Both are good companies

Making a push to

Saturate the commercial market

Looking to capitalize on price and speed

Comcast and Fios

Are both tripping over themselves

Offering high speed data access

At a fraction of the cost

There are currently big savings

To be found in the data delivery field

HBS represents both Comcast and Verizon

Our services extend to lighting up

A center city building

Bringing access to all the tenants

To bringing phone and data capabilities to your office

Many clients are beginning to use Comcast and Fios

For redundancy

(As a fail over should their T1s or PRI go down)

Some keep the voice on their T1s or PRIs

And move their data to Cable and Fios

Not only will we guide you to the best solution

We will manage the installation

Delivering the product to your location

Getting you up and running

Providing service support

As the need arises

HBS is here

To guide our clients thru the

Maze of information

Delivering smart solutions

To your business

Overpaying Telecom

 

 

 

 

 

 

 

By Andrew Backover

For 6 months, Nelson Human Resource Solutions paid $1,000 a

month for 80 phone lines that weren’t being used.

The staffing company also paid $600 a month for empty voice-mail

boxes.

Workers would switch offices and order new service. But they would

not disconnect the old service, Nelson says. The Sonoma, Calif. firm

only discovered the problem after hiring a consulting firm to check its

telecommunications expenses.

Many companies like Nelson are throwing money away as bills

skyrocket for telephone service, cellphones, wireless handhelds,

Internet accounts and laptops connected to networks.

The cost of telecommunications now ranks in the top five expenses

for most companies, up from about No. 10 a decade ago, companies

and consultants say. Companies spend 5% to 35% more than they

need to, experts say, because they pay for services they don’t use. Or

they fail to find the cheapest calling plans. They miss billing mistakes.

And employees make calls they’re not supposed to. As telecom costs

rise, so does the potential for excessive expense.

“The waste is enormous,” says Scott Schaefer, CEO of QuantumShift,

which helps companies manage communication services. “Every

single company that has over 100 employees is waking up to the fact

that (communications) is one of their largest expenses . . . and the least

understood.”

The expense isn’t minor. This year, U.S. businesses will spend an

estimated $403 billion on local and long-distance telephone service

and equipment. That is up from $274 billion in 1998, says the

Telecommunications Industry Association. In 2004, the total will

approach $600 billion, or nearly twice the Pentagon’s annual budget.

Financial services firms, where fast communication is key, spend an

average of $3,000 per year per employee — about five times the

amount of 15 years ago, says Bill Moore of consulting firm

PricewaterhouseCoopers.

In a time of layoffs and belt tightening, more companies are eyeing

telecom budgets, says analyst Maribel Dolinov of Forrester Research.

And no item is too small. Investment banking firm Salomon Smith

Barney recently suggested that its employees stop dialing 411, which

costs about $1, to get phone numbers. A handful of branch offices

have banned it. Consultants who help companies rein in telecom

expenses say most businesses waste money because of:

* Billing mistakes.

 

 

Last year, refrigeration equipment and laundryservices firm Mac-Gray upgraded its telecom network linking

regional offices in 11 cities with its Cambridge, Mass., headquarters.

But when AT&T upgraded the service, it continued to bill Mac-Gray

for the old service as well. Mac-Gray, with 500 employees and $150

million in annual revenue, failed to catch the mistake for several

months because the bill was so complicated, it says. The overcharge:

$75,000.

AT&T reimbursed Mac-Gray — but only after Mac-Gray hired a consulting

firm to handle its telecom services and to help with the dispute.

AT&T won’t comment on customers. But even it says billing disputes

are more common as customers buy more services.

Businesses aren’t the only losers. A billing error caused the county

government of Lee County, Fla. to pay $13,000 too much for longdistance

service over 4 months this year, says telecom management

firm Stonehouse Technologies. The money was refunded after the

problem was found.

How often errors occur is disputed. Consulting firm Rand Associates

says its business clients see billing mistakes on phone bills about 80%

of the time.

Often, tax-exempt organizations, such as municipal agencies, are

wrongly charged state or federal taxes, says Rand President Rudy

Richardson.

Also, computer systems that turn telecom services on and off aren’t

always in sync with billing systems. So customers might get billed for

several extra days of service, says John Gonsalves, vice president at

technology consulting firm Adventis.

Phone companies dispute that billing mistakes occur so often. The

Federal Communications Commission doesn’t track billing errors.

BellSouth, for one, says its bills contain mistakes less than 2% of the

time.

Regardless, it is up to customers to catch billing errors. And few businesses

go through bills line by line. The monthly stack of bills for

Nelson Human Resource Solutions stood 8 inches high. “There was

no one to analyze the paper,” says Chief Financial Officer Deborah

Mings. It now has QuantumShift handle its telecom operations.

* Carelessness.

 

 

Companies and organizations cannot always blamephone companies. Pricewater-houseCoopers had one client that paid

 

 

 

$80,000 in monthly service charges over 18 months for 36 cellphones

sitting in a crate in a warehouse. “It’s not that clients are lazy,” says

PWC’s Moore. “It’s simply impossible to stay on top of it.”

Eisai Research Institute, a drug research firm in Andover, Mass.,

thought it was on top of it when it banned employees from calling 900

numbers frequently used as sex, astrology and gambling hotlines. But

Eisai forgot to put the same block on its fax lines.

This year, in 1 month, an employee ran up a $1,300 hotline tab. The

company will say only that the worker wasn’t calling a sex line.

“That’s a perfect example of . . . (what) can slip through the cracks,”

says Eisai Treasurer Paul Drahnak. He expects Eisai to save $100,000

a year by turning its telecom operations over to a management firm.

* Inefficient contracts.

 

 

Because of an outdated long-distance contract,law firm Paul Hastings Janofsky & Walker wasted $300,000 last year.

The Los Angeles-based firm was in the middle of a 5-year contract

that charged 7.8 cents a minute. When the contract was signed, the

firm saw it as a good deal. But long-distance prices have plummeted.

Businesses now often get volume discounts in the 3-cent to 4-cent

range. Finding the best deal, and anticipating market trends was

beyond the 800-lawyer firm.

“We just don’t have that capability,” says Chief Information Officer

Mary Odson.

Likewise, hotel operator Windsor Capital Group estimates it was

paying $100,000 too much each year on maintenance contracts for

telecom and other technology equipment in its 24 hotels.

One California hotel, for instance, paid 40% more than a Colorado

hotel did for a maintenance contract on telephone switch equipment,

which allows guests to use the phones. The contract was negotiated by

hotel managers, who aren’t telecom experts.

“They are in the guest-services business,” says Windsor Capital Vice

President Sam Sansone. It has since hired outsourcing firm United

Asset Coverage to handle its maintenance contracts.

Complicated contracts

Buying telephone service used to be simple. Before the breakup of

AT&T in 1984, customers essentially bought local and long-distance

service from one company.

But the splintering of AT&T led to hundreds of long-distance

competitors, each clamoring for business customers with slightly

different deals.

In 1996, when Congress mandated more competition in the local

phone business, hundreds of tiny competitors started offering service.

And wireless service, once a luxury, is now a staple. In fact, 51% of

workers with cellphones say their companies pay at least part of the

monthly tab, says research firm Telephia. Also, companies are paying

to connect more employees to the Internet.

As telecom expenses have grown, companies have struggled to

respond.

Most large firms have designated employees watching over telecom

and computer systems. But in small firms, the chore often falls to

chief financial officers, who lack expertise. “Every company in the

world can’t afford to have an expert in house,” says Eisai Research’s

Drahnak.

Also, telecom expenses can be hard to track. For example, Internet

access charges might fall under the budget of a company’s information

technology department. But cellphones, often purchased by employees

and then expensed, might fall under travel budgets.

Consolidating bills can be hard, too. Law firm Paul Hastings has

seven U.S. offices. It buys telecom services from 24 companies. The

bills came in so often, at different times of the month, that they sometimes

got lost or sat on desks until they were late, Odson says.

Getting help

Last year, Odson handed management of the $1.8 million domestic

telecom budget to QuantumShift. Odson expects to save $700,000

this year. One big help? QuantumShift found it a better long-distance

contract.

QuantumShift’s software also searches for billing errors and unused

lines. It consolidates bills, which saves time, and lets Odson more

easily order new services. And it lets her analyze expenses to a single

phone number.

Even after paying for QuantumShift’s services, Odson expects

telecom costs to be about 26% less this year.

Companies that help others cut telecom costs are doing a brisk

business. Privately held QuantumShift had 116 customers as of June,

up from 45 the year before. It posted a 300% year-over-year revenue

gain in its first fiscal quarter. Stonehouse Technologies recently added

20 employees, bringing its total to 60. Veramark Technologies says its

outsourcing revenue has grown 30% in the past 10 months.

Phone firms, too, are trying to cash in. AT&T’s consulting arm

recently redesigned a customer-service system for First Union. It will

save the bank $38 million over 5 years, says AT&T executive Randy

Johnston. That’s because First Union’s customer service agents will

have faster access to more information, which means it’ll take less

time to handle customer calls.

Just as regular consumers can save money on phone costs by shopping

for calling plans that fit their needs and checking bills for errors,

companies can save money by taking simple steps:

* When billing errors occur, report them to the phone companies’

customer service team — not the sales team, says AT&T.

* Make sure disputes are noted in computer systems. That way, a

response is likely to be faster. Also, customers won’t have their service

turned off because they didn’t pay disputed bills.

* After ordering new service, ask for a detailed explanation of the bill.

Companies that don’t pay attention could find themselves in the same

place as Mac-Gray Chief Financial Officer Michael Shea.

“You wake up some morning and say, ’Holy cow. How am I spending

$1 million on communications,’ . . . and no one knows.”

Our Perspective:

This is an old article that appeared in 2001. As the old saying go, “The more things change, the more they stay the same. We see instances like this happening constantly.

How much are you paying for Telecom or voice and data services. I thinks this presents a strong case on why you should be looking at this now!

For more information email george@hbsadvantage.com  or call 856-857-1230

Learn more by visiting us on the web www.hutchinsonbusinesssolutions.com

 

 

Beware of Verizon Calls for Savings

Verizon is up to their same old tricks …

We have been getting feedback from our clients that they have been receiving telephone calls recently from Verizon representatives asking to review their bill and promising savings.

 First, they will ask for a copy of your bill so they can provide you with a comparison of your charges.  Here is the old “bait and switch”, the comparison is incomplete. The base line charge ($15.00 per line) is listed but what they don’t show you are more important — all the fees and taxes associated with those charges. All carriers must charge these fees and taxes. What initially looks like a savings is nothing but deception. To do an apples to apples comparison ask them to give you all the fees and taxes, as they would appear on your bill.

 Buyers beware …

They are also pushing an offer of unlimited calling. This is the hook. You need to drill down and look at each individual line and examine the calling patterns for each phone number you have and all past invoices. Most likely, some of these lines have minimal usage and you will end up paying more for this feature.

 We have seen several examples of inaccurate phone line count.  Verizon’s proposal only indicated 6 lines when in actuality the client had 10 lines. Obviously, the bottom line of the Verizon proposal was going to look much better to the client, until he receives his first bill.

 More than you expect …

If you receive a call promising savings from Verizon, don’t be fooled! Please give us a call and let HBS review the proposal for you. Otherwise, you may end up paying much more for your basic services based on a false proposal.

 Hutchinson Business Solutions is an independent voice and data solutions consultant. Thru our strategic partnership, we represent over 50 of the major providers currently providing these services for business. We provide a free review of your current services and will shop your account to our providers, presenting an overview of the current market opportunities available for your business.

 To learn more about finding savings in the deregulated voice and data market, contact george@hbsadvantage.com or call 856-857-1230.

Find out more information by visiting our website www.hutchinsonbusinesssolutions.com

Three Ways to Save on Telecom

3 Ways a Telecom Management System Will Save You Money

By Steve J Murphy

As reported in Ezine Articles

A telecom management system is first and foremost a money saver. If the telecom system cannot provide a clear reason for you to invest your time and money (but, you may not need to pay for the system, more on that later), then why would you pursue it as a strategy? The return on investment, both hard dollar costs and time and energy invested, needs to be clear before the investment is made.

So, where do telecom management systems generate their payback? Telecom systems certainly create efficiencies in terms of automating manual processes within the IT and finance organizations, but our focus is on the hard dollar savings telecom management systems are renown for delivering. These hard dollar savings are in the “indisputable” elements of the telecom program. The hard dollar savings create a solid business case that managers can take to their executives for concurrence to move forward. If the investment element of the telecom system is low or free, then the only expenses that need to be covered before generating a clear return to the company is the set-up effort.

Where do these returns come from? Hard dollar savings can only be generated buy lowering the telecom bills of the user. This lowering can occur one of 3 ways: 1) by reducing the rates that the existing carrier is bill, 2) by changing the services the user is paying for so service is maintain or even enhanced while costs go down, and 3) by introducing new carriers with superior value propositions. A comprehensive telecom management operation will accomplish these three things and more.

Reducing rates charged by an existing carrier can be challenging. After all, you are typically bound by a contract or tariff, reducing the flexibility that the carrier has in changing what is being charged. Getting rates changed is possible, but it requires work on your part and may also force a contract extension. If you are happy with your carrier, a contract extension may be tolerable. The telecom expense reductions seen in this scenario typically range less than 10%, Telecom carriers in a re-negotiation proceeding do not have a significant incentive to reduce rates, so some sort of loyalty discount is typically rolled out. The two remaining methods of reducing your telecom expenses, however, are preferred.

Changing carrier’s services is a very effective means of lowering current spending without interrupting or interfering with an existing telecommunications carrier contract. Evaluating the specific services at each of your locations, determining whether you can simply disconnect a service, consolidating service to more efficient facilities, or up-grading to a newer technology can yield savings of 10% to 20% if the network has not been optimized for quite some time.

The best savings are usually obtained by actually using new telecom service providers to replace existing services with much more competitively priced services. There are many quality service providers that supply similar quality to the larger carriers at rates in excess of 30% below what the larger telecom carriers charge. Strategies are available for every comfort level, so using an alternative carrier to lower your cost can be extremely beneficial.

Consider using a telecom management platform to tie these three strategies together. Platforms that detail telecom inventory, analyze billing trends, as well as provide flexible analytics are best suited to support cost containment and reduction initiatives.

Our perspective:

If left unchecked, voice and data cost can become a major business expense. As the industry continues to evole, the cost of voice and data have become more competitive while the increase efficiencies will take your business to a new level. For too long business has settled for the mediocresy of service provided by the major carriers.  Significant savings can be found by shopping your account.

Hutchinson Business Solutions provides corporate financial solutions. We are an independent broker who represent over 50 of the major voice and data providers.

Each business is unique. We will work with you to find the right provider that will allow you to increase your efficiencies and address your needs.

To learn more contact george@hbsadvantage.com