Promises, promises, promises – Telecom Vendor Contract Woes
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, the telecom vendors have made the validation and accuracy of the billing, after the contract is signed, a farce.
For a nationwide financial organization with over 1,600 locations, the negotiations and getting the contracts created and signed for their telecom services were 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 were a major component of the agreement however, many areas were overlooked in the negotiation phase.
RadiusPoint’s monthly audit and continuous follow up with the telecom vendor
Fortunately, this financial 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 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.
Immediately RadiusPoint identified several different areas of overcharge:
- Features billed that were not supposed to be billed under the new contract
- Phone numbers on the consolidated invoice that were not a part of the contract
- Long distance 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.
On the contract rates that were incorrect, RadiusPoint provided a monthly report by phone number to the vendor to apply credits and correct rates. This process continued for first 18 months 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 $695K!
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