Unchecked Expense

If you want an indicator of the challenges facing organizations in managing their mushrooming telecom expenses, look no further than the evolution of Nita Singh’s company, American Business Communication, Inc. (ABC), in Maple Grove. Founded by Singh in 1990 to help companies root out errors in their phone bills, ABC’s services now include negotiating cell phone contracts for clients, consulting on inventory management issues, and helping organizations create processes that rein in runaway wireless and wired-line telecommunication costs.

ABC’s growth reflects the increased complexity of a telecommunications billing environment that now features the convergence of voice and data services and other hard-to-track wireless spending. Telecommunications has become a top-five line-item budgetary expense for many companies, placing it firmly in the crosshairs of chief financial officers. “I think our company’s continued existence speaks to the state of the problem,” Singh says. “We find about 90 percent of the telecom invoices we audit have some form of billing mistake, and that we can on average save clients 25 percent on telecom billings through our auditing work.”

The Aberdeen Group, a telecommunications research company in Boston, estimates that an average of 7 to 12 percent of telecom service charges are in error, a figure that many local telecommunication expense management experts consider conservative.

Tracking Billing Errors

The Aberdeen Group, a telecommunications research company in Boston, estimates that an average of 7 to 12 percent of telecom service charges are in error, a figure that many local telecommunication expense management experts consider conservative. Why these errors happen is a source of hot debate. Some attribute the problem to telecom carriers’ poorly designed billing systems, while others believe carriers could do far more to control inflated costs through increased standardization and automation of their procurement and billing practices.

Sheer volume and complexity of today’s billing practices play a role as well. A large enterprise with multiple locations can be running many hundreds of phone lines, DSL, cable, or T1 connections, as well as have many thousands of cell phones, PDAs, laptops, and other mobile devices with voice, data, and networking access.