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Telecom Budget Survival Guide Presenter: Leo Berz, Director Professional Services, Telecom - Ecova Date: 06/19/2013
Telecom Budget Survival Guide
Presenter: Leo Berz, Director Professional Services, Telecom - Ecova Date: 06/19/2013
Agenda
Today’s Telecom Environment
Budgeting Tools
Variance Tracking and Analysis
Challenges
Best Practice
Summing It Up
Q&A
Telecom Is Under The Microscope
Total telecom expenses are on the rise
Typically .25 to 1.5% of revenue
No longer accepted “as is”
Telecom industry rapidly changing
Not necessarily under your control
Monday Morning Blues
Your telecom expenses are way over budget
You spent the entire weekend frantically trying to figure out why
It’s now 9 AM, and the CFO is waiting for your explanation
What will you do; what will you do?
Survey Question
Are telecom expenses and budgets getting more scrutiny in your organization than before?
A. Yes
B. No
C. Don’t know
Budget Tools
Initial budget
– Spend history
– Planned changes
Accrual files
Variance reports and analysis
Budget update
– Minor modifications
Budget reforecast
– Larger impacting
History Is The Window To The FutureSpend by Service 2012/Jul 2012/Aug 2012/Sep 2012/Oct 2012/Nov 2012/Dec Totals
Data Services $617,259.02 $595,660.02 $585,578.00 $656,245.26 $715,870.29 $682,310.81 $3,852,923.40
Local $669,472.48 $672,875.91 $674,681.27 $698,567.86 $690,026.71 $711,645.28 $4,117,269.51
Long Distance $108,960.87 $107,393.68 $110,064.34 $115,952.74 $40,854.81 ($29,857.88) $453,368.56
Other Telecom $69,816.78 $69,913.40 $69,813.79 $69,999.27 $69,830.79 $70,476.08 $419,850.11
Wireless $84,362.14 $87,611.70 $85,873.80 $91,589.17 $156,196.34 $141,224.16 $646,857.31
Totals $1,549,871.29 $1,533,454.71 $1,526,011.20 $1,632,354.30 $1,672,778.94 $1,575,798.45 $9,490,268.89
Budget should start with previous years spend by service type (GL) and location
Cost center owners need to provide input on future needs
Pending business and network changes need to be factored in
All stakeholders and cost center owners need to have visibility and buy-in of the final budget
Know What To Expect
Use historical average to estimate invoices yet to be received
Accrued amounts should be backed out of financial systems once actual invoice is processed or new accrual file is available
Vendor Account GL/Service Months Average Accrual Last Bill
Arkadin, Inc. XXXXX 17545400/Conference 1 $235,146 $235,146 4/30/2013
AT&T XXXXX 17545200/LD 1 $78,653 $ 78,653 4/29/2013
CenturyLink XXXXX 17545100/Local 1 $ 1,568 $ 1,568 4/28/2013
Eatel XXXXX 17545100/Local 2 $1,343 $ 2,686 3/15/2013
Granite XXXXX 17545100/Local 1 $156,238 $156,238 4/30/2013
HickoryTech XXXXX 17545100/Local 1 $ 118 $ 118.91 4/27/2013
Mobil Fone XXXXX 17545600/Conference 1 $ 51 $ 51.82 4/28/2013
Verizon Wireless XXXXX 17545600/Wireless 1 $ 52 $52.82 4/30/2013
TW Telecom XXXXX 17545300/Data 1 $16,930 $16,930 4/30/2013
Over-Budget is Not The Problem;Not Being Able To Explain It Is!
Sum of Site Total
Actuals by Bill Month $ 296 $ 592
SiteName ServiceGroup 201301 201302 YTD Budget Out of budget % Of budget
Site 1926 Data Services $ 510 $ 510 $ 592 $ 428 72%
Local $ 407 $ 407 $ 817 $ (3) 0%
Long Distance $ 46 $ (46) -100%
Other Telecom $ - $ - 0%
Wireless $ - $ - 0%
Site 2019 Data Services $ 510 $ 510 $ 592 $ 428 72%
Local $ 1,246 $ 1,246 $ 2,478 $ 14 1%
Long Distance $ 318 $ 221 $ 550 $ (11) -2%
Other Telecom $ - $ - 0%
Wireless $ - $ - 0%
Grand Total $ 375,628 $ 364,952 $ 535,472 $ 204,808 38%
Data expense spike caused by a network migration
Survey Question
What is your biggest budget challenge?
A. Lack of resources
B. Lack of visibility
C. Lack of control
D. Other
E. Don’t know
Budget Challenges
Telecom is a very dynamic environment
Lack of visibility
Wireless and conferencing services
Rogue service orders
Budget shuffle
Expiring contracts
Shortfall penalties or missed achievement credits
Network migrations
Executive mandated cuts
“Regulatory” charges
Best Practices Push responsibility, accountability and visibility down as
low in the organization as possible
Budgets should initially be developed from the bottom up
Take planned business and network changes into consideration
Variance analysis should be preformed quarterly at a minimum
Ensure centralized control of both wireline and wireless service orders
Actively track contract expirations and MARCs
Services should be reviewed every 1 to 3 years
Reforecast budget when necessary
Use lessons learned to improve the process
Consider budgeting an integral part of your TLM program
– Formula For Success
S=(D+B+T)*P where
– S=success
– D=data
– B=business knowledge
• locations• contracts• Activities
– T =telecom knowledge
• networks• regulatory• Procedures
– P=process
• budget• tracking• variance analysis• All aspects of Telecom Lifecycle Management
Upcoming Ecova Webinars
INSIDE ENERGY & SUSTAINABILITY Energy Market Intelligence: What’s Happening Today? –
June 20th
Discovering Exceptional Value with Rebate Management Solutions – June 27th
Telecom Strategic Sourcing Secrets - September 25th
DIAL IN THE SAVINGS
Questions, comments, suggestions? [email protected]
Q&A
Thank You for Attending
