The following is a detailed look into a small portion of a voice service audit that the consultants at TelCon Associates recently completed for a Texas REIT.

Our intent for presenting this telecom audit case study is twofold: 1) to stress the importance of thorough and routine telecom auditing of your voice and data services as part of your overall cost-reduction strategy, and; 2) to provide you with the specific cost-saving strategies were employed while conducting this audit so that you can use and apply some or all of them to help
reduce and manage your company’s telecom spending.

Although this REIT’s real estate portfolio consists of a total of 150 apartment communities located in a variety of states, TelCon was engaged and instructed to conduct a “test” audit of only eight locations. This “micro-audit” enabled TelCon to provide the REIT with a general overview of telecom services for communities chosen at random. The specific communities to be audited were decided on by the REIT executives.

For purposes of brevity as well as clarity, we have reduced the entire audit into important areas for savings and then categorized them into the following strategies:

Telecom Strategy # 1: Identify and Eliminate Unused Lines

Most companies (especially multi-location ones) are paying monthly fees for unused or unidentified telephone lines. This apartment community audit turned up numerous examples of this.  Not only were many lines going unused, there were some that could not even be identified.

The fail-safe method for identifying lines that are not being used is to take the time to call each one and determine the location of the line itself. Always allow a connection to ring at least 15-20 times to eliminate the possibility it being a security or alarm line.

In addition, user surveys can be extremely helpful in the process of identifying lines that are going unused. By simply asking questions of users at a specific location, you will gain much information about the usage patterns for all the lines at that location.

If employees have difficulty identifying or even recognizing a telephone number, it is
safe to say that line is probably going unused and can be eliminated.

Telecom Strategy #2: Use “Backup” Plans for Low Usage Lines

Every business has lines (i.e. alarm lines, elevator lines, metering lines, pool lines, security lines, gate and entry lines, etc.) that are functional but infrequently or sometimes even rarely used. In the case of our apartment community audit, we discovered many instances where security lines were subscribed to plans that were designed for high usage voice traffic.

For example, more than one community in this audit bundled two security lines onto a “complete choice” two-line plan for $134 per month. Although not widely advertised, many local carriers offer low usage plans with low monthly fees and per minute rates for calling. In this case, we recommended a “backup line” plan for the security lines at only $21.38 per month and 5 cent per minute calling fees.

Since these lines are rarely used, the per minute fees generally will not apply. The savings on this example alone totaled $1215.36 per year.

Telecom Strategy #3: Eliminate DSL Service on Fax Lines or Unused Lines

Many organizations and businesses now use high-speed dedicated internet service throughout their organization. Prior to this however, some subscribed to DSL services offered by local carriers. A problem arises when users fail to disconnect unused or fax lines from DSL services at the time they make the change to other dedicated internet service options.

This REIT audit turned up instances where fax lines were still being charged for DSL service even though the community was utilizing a 512kbps dedicated internet service.

If your organization has used DSL in the past, or continues to employ DSL services, be sure that you keep an inventory of the lines that are subscribed. Eliminate DSL service on fax lines and other lines where the service is simply not needed.

Telecom Strategy #4: Cancel Unused/Unneeded
Features on Low Usage Lines

Today’s local service providers offer a huge variety of local service calling features. These added features can be a huge profit center for local providers - especially for unsuspecting consumers and businesses who pay for them and subsequently never use them.

This REIT audit uncovered numerous low usage lines with features such as: “call forwarding busy line”, “call forwarding busy don’t answer”, and others that added no value to the lines on which they were placed. Eliminating a $3.00/mo feature on one line may seem trivial, but the cumulative affect of many lines over many months’ worth of billing can be substantial.

Telecom Strategy #5: Consider Longer Local Contract for Huge Discounts

Local service providers love contracts - the longer the better. Service contracts allow carriers to not only “lock in” a customer, but also help them project revenue for longer periods into the future. As beneficial as they are to the carriers themselves, local service contracts can benefit the customer as well.

For example, many multi-location companies (those that contain entities such as apartment communities, satellite offices, franchises, etc.) will typically have 5-10 lines per location in use. In the case of our audit, we identified one apartment community that was billed $323.00 per month for a 5-line local service plan. By signing a 36-month contract, we were able to reduce this bill by 40% - resulting in a savings of $1720.92 per year.

Be aware that most local service contracts will require long-distance service to stay with that local carrier. It is best to analyze ALL factors to determine the absolute best options. The recommendation in this case was to go for the longer contract and reap the savings since very little long distance was being used at this location.

Telecom Strategy #6: Cancel Directory Advertising
Unless Absolutely Necessary

It is hard to imagine the world today without the internet and search engines such Google and Yahoo. For most of us, the days of looking for information in the White Pages or Yellow Pages are a thing of the past.

Despite that, the majority of businesses today still feel the need for White Pages and Yellow Pages listings. Unfortunately, directory advertising continues to be extremely expensive. In the case of our audit, we identified one apartment complex that was paying $51.00 per month for a “bold” listing in the area White Pages directory.

Employees at the location had no idea that the listing even existed. The recommendation was to cancel the listing (in writing) and pocket the extra $600+ per year in savings.

Telecom Strategy #7: Cancel LD Service Where
Needed to Avoid Minimum Monthly Charges

Carriers typically charge customers a “minimum usage” fee each month for every line that is subscribed to long distance service. This monthly charge usually is in the $6.00 - $15 per month range.

This audit turned up numerous lines that NEVER used long distance service, but were being charged the monthly minimum usage charge. The recommendation was to cancel the long distance service on any line that was not used for long distance calling, saving an average of $159 per year for each line.

The economy in 2009-2010 will be stagnant at best. Companies are looking for ways to boost the bottom line without laying off and cutting their workforce. As you can see from the  case study outlined here, a thorough telecom audit can be a first line of defense for cutting expenses and weathering today’s tough economic times.