Do you know how much a company spends on telecommunications services, from mobile phones to fixed lines to data feeds to video-conferencing? David Stanton, vice president for enterprise sales, Asia, at Cable & Wireless can tell you.
“It can get out of control,” he warns. “Ten thousand dollars can become 100,000, can become 1 million, can become many millions. The geographies in the region are spread out and you have a lot of mobility inside your workforce.”
Stanton spoke to CFO Innovation’s Cesar Bacani on what large companies in Asia are doing to manage telecom expenses in today’s environment, how much they are saving and how much they are paying service providers like Cable & Wireless.
What have you been seeing in Asia during the global financial crisis in terms of telecom services?
What’s unique about Asia versus Europe or North America is many of the markets [in Asia] that our customers are operating in are actually growing very strongly. Of course it’s always important to save money, but not at the expense of growth. What I have witnessed since about October 2008 is that many organisations did not have control of their [telecom] cost estimates. Speed and execution was more important.
The other thing we have noticed over that time in Asia is that usage-based consumption of mobile, remote access, voice services – all of sudden it can get out of control. Ten thousand dollars can become 100,000, can become 1 million, can become many millions. The geographies in the region are spread out and you have a lot of mobility inside your workforce.
So then you have a dilemma in many of these companies: How do you give the business what it needs in real time every time without giving up control on visibility? Do I procure all these services centrally or do I trust my business and have federated buys? There’s no right answer. Every organisation is finding out what balance works for them.
What I get from this is that there has been a lot of large companies over the past 18 months or so that have turned over management of telecom services to Cable & Wireless rather than do it in-house.
Yes. In Asia, we have acquired more than three dozen customers [since June last year] . . . Some organisations have the scale to do it in-house and do it very efficiently. But many don’t. And of the companies that do, some would not choose to use their highly skilled people doing what they would consider as fairly utilitarian tasks. They’d rather invest their talent on more strategic issues, which actually is a common sense approach.
How much are these companies saving from the resulting cost efficiencies?
It varies a lot, because the expertise with which many companies manage their system varies. We’ve had examples where we have been able to drive 30% cost efficiencies. In other clients that had been able to control their vendor mix better, perhaps that isn’t achievable. But we’re finding great efficiencies to be had, particularly in the mobile area.
Many clients that perhaps do not have the control, perhaps do not have the visibility into their total communications spend today, it’s a little bit of a guess what efficiencies could be possible, particularly if [telecom expenses have not] been managed closely. We’ll have to focus for a year, two years. It’s very realistic to drive 30%-plus efficiencies. If you have a total telecommunication budget of tens of millions of dollars, all of a sudden, those efficiencies are actually worth a lot of money.
MOBILE SERVICES
Let’s talk about specifics. How do you as a managed services provider squeeze out savings from your client’s total telecom spend?
There are many different approaches to optimising your cost on, for example, mobile phones. At a very basic level, what is the inventory the client has? Is the inventory the same inventory that they’re getting invoiced for? Not always. Are the tariffs on the mobile phones the tariffs the sourcing team spent many months negotiating with the chosen service providers? Has the tariff plan been applied properly? This is all about bringing simplicity to the communications expense management.
2012, Feb 09 
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Enterprise Telecom Guide
Computerworld HK is going to publishe an Enterprise Telecom Solutions Guide in June.
For more info, please email to cyip@questexasia.com
Website: www.cw.com.hk