Promises, promises, promises – Major Challenges in Telecom Vendor Contract Woes

by | Last updated Aug 22, 2018 | Healthcare | 0 comments

Promises, promises, promises - Telecom Vendor Contract Woes

Major Challenges: Telecom Vendor Contract rates

Negotiating telecom and IT contracts are a common occurrence for the CIO and IT team.  Over the past six years, telecom vendors have made the validation and accuracy of the billing, after the contract is signed, a farce.

Problem:

For a nationwide healthcare organization with 250 locations, the negotiation and getting the contracts created and signed for their telecom services was short work for the CIO and IT Team.   The discussions centered around the cost and the Service Level Agreements for the circuits that would be a part of the contract.  The local service or POTS lines and PRI’s were an afterthought since the services and pricing for those service types are straightforward.  And how often do your POTS line go down and if it does go down, it typically would not adversely affect the business.

Solution:

RadiusPoint’s monthly audit and continuous follow up with the telecom vendor

Fortunately, this Healthcare organization uses RadiusPoint to validate the monthly invoices with a line item audit.  When the new contract was signed, RadiusPoint requested the list of all phone numbers and circuits that would be billed under the new contract rates.  RadiusPoint then loaded those rates into ExpenseLogic for the monthly line item audit by phone number and circuit number.

Immediately RadiusPoint identified several different areas of overcharge:

  1. Features billed that were not supposed to be billed under the new contract
  2. Phone numbers on the consolidated invoice that were not a part of the contract
  3. PRI circuit charges that did not match up to the contract rates

RadiusPoint began notifying the vendor monthly of all errors that were on the invoice.  Some of the issues were easy fixes and the vendor stated that the correct rates didn’t get applied to the phone number or circuit number.  However, the bigger issue that was identified was the phone numbers and circuits that did not make it on to the contract.   The vendor would have had access to all services that they provided to the client, however certain phone numbers and circuits were missed.

Another issue involved a different type of service other than a 1FB billing on certain lines.  This client had a mixture of 1MB’s, Complete Choice and Centrex lines, all billing at a much higher rate than the contract rate offered.   The vendor did not bother to tell the Client that these types of lines would not be eligible for the 1FB contract rate.  On these, the Client had to make a choice, keep the service that they have and reduce the savings projections to not include those lines or change all of the lines to 1FB’s to get the contract rate on each line.

The decision was made to change the services and RadiusPoint worked with the vendor to change each type of service and the monthly rate to reflect the contract rate which allowed the Client to see the projected savings.

Result:

On the contract rates that were incorrect, RadiusPoint provided a monthly report by phone and circuit number to the vendor to apply credits and correct rates.  This process continued for 12 months, the entire first year of the contract.  The vendor’s excuse for the delay and incorrect rates each month was that they were having an issue applying the rate that was quoted.  The issues were resolved after the first year and credits were finally given to the Client in one lump sum over $800K!

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Promises, promises, promises – Major Challenges in Telecom Vendor Contract Woes Updated: Last updated Aug 22, 2018 By: Sharon Watkins