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Top 1,000 UK Companies Waste £800 million Every Year On Telecommunications Services, Expense Management Expert Claims

Telecomms cost transparency remains a "hidden issue" for company management

London - New York - Tokyo - April, 2006 - Britain's biggest companies could be throwing away at least £800 million every year by failing to put in effective controls on telecommunications expenses, according to an expert in telecoms expense management.

MDSL, the leading provider of OnDemand telecommunications expense management solutions, believes that overpayment for telecommunications services remains a "hidden issue" which has yet to be effectively addressed by Britain's largest enterprises.

Despite an increasingly competitive UK market for wireless and fixed-line services, researchers have regularly highlighted the problem of invoices and reporting. Technology analyst Gartner Group has already identified that enterprises are commonly overpaying on supply by between six and eight percent with some 80 percent of all supplier invoices thought to be inaccurate.

In a USA study, Aberdeen Group estimated that large enterprises were each throwing away up to £6 million ($US 8.7 million) annually by failing to deploy technology effectively to centrally manage telecommunications expenditure.

With the leading 1,000 UK organisations typically spending at least £4 million on telecommunications services annually, the overall wastage in overpayments could be as high as £320 million every year. Expense management specialists such as MDSL claim to deliver savings of up to 20 - 25% so, when all the different facets of telecommunications expenses are fully managed, that figure is likely to be as high as £800 million.

Common problems include circuits that are not switched off - enabling rogue calls from ex-employees to go unchecked, inadequate analysis of usage data allowing inaccurate supplier invoices to go unchallenged and failure to enforce agreed service discounts.

Ben Mendoza, CEO of MDSL said "Because many large UK firms have international operations with devolved management structures and cost centres, centralising and applying effective management of telecommunications costs is a very complex and difficult area to manage.

"Many CFOs understand that this is a multi-faceted problem with data cleansing, network management aspects as well as procurement, billing, invoice reconciliation and contract negotiation issues. However, unless companies look beyond the short-term savings to develop systems which provide a framework for cost transparency and delivering a management capability in the future, they will continue to waste resources which could be more effectively redeployed to other areas of their businesses."

The CIO, says MDSL, has a crucial role in highlighting the part technology can play in making these savings realistic to achieve.

"The onus is on the CIO to make the CFO see that obstacles to telecoms efficiencies can be simply overcome through TEM. When CFOs understand that the route to telecoms savings is within their grasp, they quickly realise their responsibilities to the business and to their shareholders not to waste money."