Telecom Spend Is Rising Despite Decreasing Fixed Telecom Costs
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.