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Issue of October 2006 

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Keeping telecom costs in check

Although telecom prices have come down substantially, telecom cost management is still a major concern for the average enterprise. This aspect concerning the telecom segment was in focus at the Second Annual Workshop on Managing Cost of Telecom organised by recently.

Alok Shende, Director, ICT Practice, Frost and Sullivan opined that enterprises should focus on activity-based costing to manage costs effectively. According to him, one of the reasons for increased costs is the existence of inconsistent Service Level Agreement (SLA) measurements with no transparent mechanisms for this activity. SLAs should be comprehensive in terms of services and technology. In such a scenario, consolidation and single point of accountability by having a single service provider (SP) also helps reduce costs.

However, having a single SP means that the enterprise becomes dependent not only on one SP but also on technology and upgradation. One way out here is to opt for convergence i.e. aggregation and consolidation of multiple channels and electronic resources so that the cost of management comes down. Shende also warns corporates to recheck agreements for indirect costs such as paying for services that have not been asked for.

Neeraj Satpall, Vice-president, GTL elaborated, “To begin with, select the right SP, outline the expectations that you have from the SP, have an effective SLA with clearly defined objectives, demand root cause analysis in case of a problem and insist on compliance.” Monitoring of expenditure and billing is essential along with negotiation of discounts. Enterprises can also reduce costs by having reports based on usage patterns.

Sandeep Mathur, President, Tata Indicom Enterprise Business Unit, VSNL gave the SP perspective to reducing costs by having an outsourced model of managed services—a usage-based model such as bandwidth-on-demand, and convergence of telecom and IT.

There are many applications driving connectivity such as ERP, CRM and e-mail and voice. Lt Col H S Bedi, VSM, Managing Director, Tulip IT Services stated, “Always use an alternate SP for back-up. Availability of last mile connectivity is no longer an issue. Today corporates can go beyond branch connectivity and scale up the bandwidth from 64 Kbps onwards.”

Pankaj Gupta (PJ), President, Amtel stated, “Corporates are increasingly shifting from landline to mobile devices. The latter have become a corporate asset. As a result enterprises need to have company-wide mobile policies in place.”

D Purushothaman, Manager, Telecommunication, Apollo Hospitals, Chennai said, “Our per capita expense is on the increase to keep pace with rising bandwidth demands. It is necessary to have an ISDN backup to provide the required redundancy.” He suggested using the right EPABX, shifting from analogue to digital lines and implementing a call monitoring system to help reduce costs.

“Fixing the problem and solving it for good is the need of the hour. Ask questions to reduce costs,” says Rajiv Gerela, General Manager, Technologies, Wipro BPO.

Vivek Joshi, Vice-president, IT, HDFC Bank was of the opinion that the CUG approach works better than VoIP in terms of cost reduction.

The meet concluded with the thought that multiple SPs help in offering competitive pricing to large enterprises, and discounts depending on required redundancies, and enable to reduce costs depending on the size of the industry.

—Priya Jain

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