Telecom Spend Is Rising Despite Decreasing Fixed Telecom Costs

By Kevin Donoghue  |  Posted 2010-09-26 Print this article Print

Challenge No. 2: Telecom spend is rising despite decreasing fixed telecom costs

In a competitive market in which technology is continually replaced with new, leading-edge technology, prices are expected to continually decline. Why, then, do most CIOs find that their spending for network services does not decline?

One reason that the projected procurement savings are not realized centers on the fact that contracts are negotiated on old technology and past consumption needs. Despite best efforts to forecast the future, new innovations impact network services, bandwidth needs and consumption patterns. Multiprotocol Label Switching (MPLS) over IP has become the backbone network technology used by service providers to deliver voice over IP (VOIP), VPNs and video. These new technologies promise savings and convenience over old technology used for calls, data transport and video conferencing, but the new technology also requires new quality of service (QOS) agreements.

Challenge No. 3: Billing errors will continue to occur

Billing errors occur because telecom services include some of the most complex charges of all invoices the enterprise receives. The charges include tangible assets (lines and circuits, with decentralized inventory spread over multiple locations) and intangible services. To billing elements (peak versus off-peak and volume-based discounts), add another layer of potential confusion: Move, Add, Change, Disconnect (MACD) service order activity-which creates a moving target that carriers must reconcile with billing.

Kevin Donoghue is President of Telesoft. Kevin has over 20 years of extensive sales and management experience and a proven track record of building successful companies in the enterprise software industry. Kevin is responsible for leading company strategy and operations at Telesoft. Prior to joining Telesoft, Kevin served as vice president of sales for NetPro Computing, where he grew company revenue 200 percent over a four-year period (ultimately resulting in an acquisition by Quest Software in 2008). Kevin's previous positions include senior vice president of sales and marketing at Intesource, vice president of Americas Operations at Viasoft, and Sales Executive, IBM Corporation. Kevin holds dual degrees in both Accounting and Marketing from Drexel University. He can be reached at

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