Giant Carrier’s Bankruptcy Filing Highlights Importance of Telecom Expense Management

By Steve Parrino, Business Writer

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Giant Carrier’s Bankruptcy Filing Highlights Importance of Telecom Expense Management

In the Wake of WorldCom

The breathtaking demise of WorldCom has meted out a wide swath of misery for the company’s customers, investors, employees and suppliers.

As the world’s largest bankruptcy continues to reverberate, several issues loom for businesses that have relied on WorldCom services. Among them are whether to change carriers, how to get adequate customer service from a diminished WorldCom workforce, and how to address any credits a customer may be due from the fallen carrier.

Not surprisingly, the WorldCom corporate customers best able to deal with these matters are those that have a good handle on their telecom services and costs. Many of the companies that enjoy this advantage have gained it by partnering with a telecommunications expense management outsourcer.

Should I Stay or Should I go?

Some stark realities face companies considering a move from WorldCom to another carrier.

First, if they do not have a complete inventory of their telecommunications services, they cannot be certain that all services will be moved. In addition, many companies do not know whether they are being charged properly for the services they are receiving, a problem that will not go away with a carrier switch. Finally, companies may be owed credits for overcharges resulting from pricing mistakes, delayed disconnection and other errors.

The current tough economic environment has only made matters worse.

“Just about every corporation I’ve spoken to in the last year has gone through some sort of layoff,” says David Neil, vice president and research director of Gartner, Inc., “and in many cases telecom expense management is something not being done by the enterprise because it has fewer people.

“In general, telecom expense management is a very good candidate for outsourcing, because it’s one of those repetitive, day-to-day operational tasks that’s important, though not strategic, to the enterprise.”

Companies that have engaged a telecommunications expense management outsourcer are well situated to weigh the pros and cons of making a carrier switch.

Firms such as MSS*Group Inc.Æ, Castle Rock, Colorado, and Stonehouse Technologies, Inc., Plano, Texas, are outsourcing service providers who track, analyze and verify telecom expenses for enterprises, then ensure accurate, timely payment of their bills. In addition to controlling the cost of telecom services – one of the top five expenses in most companies – this ongoing, close monitoring ensures companies know what services they have.

Your Estimated Wait Time Is…

With WorldCom facing a deluge of customers seeking answers and assistance, an outsourcing service provider can be invaluable to a company trying to get help with services and billing. Because they work with the carrier day in and day out on behalf of their clients, firms such as MSS*Group and Stonehouse know whom to call and, equally important, what to do once they have someone on the line.

“We have contacts,” says John Podrovitz, CEO and president of MSS*Group, “and when we connect with a customer service rep, we have computer screens that match the carrier’s. And we speak their language. We can fix a problem in a few minutes that can literally take hours for a customer to resolve.”

A service provider also can be an invaluable partner once the decision is made to switch carriers, particularly, as is common, if the organization has thousands of circuits, services and telephone bills distributed across disparate entities and locations.

“If a WorldCom customer decides to make a carrier switch, the new carrier will want to know what products and services are involved and their locations,” says Garry Plagenhoef, director of consulting for Stonehouse Technologies. “An order will need to be placed for every single service and location that is going to be switched. You need to have an exact inventory of the current services and locations you want the new carrier to provide.”

Getting Credit Where Credit Is Due

WorldCom customers that were overcharged prior to the carrier’s bankruptcy have little hope of retrieving the loss. With the filing, they join a long list of unsecured creditors.

Customers served by an outsourcer, however, are among those in the best position to stem further losses.

“For our customers, we drew a line as of Friday, July 19, the last business day before WorldCom filed bankruptcy on July 21,” reports Podrovitz. “Going forward, everything we have identified as pre-filing, such as credits due and credit memos, will be tracked separately from problems that occur post-filing.”

How important is such attention to detail? According to the service providers, companies typically overpay 10 percent for telecom services. And 80 percent of phone bills have mistakes in them. You do the math. Or better yet, let a telecom expense service provider help you.

Lessons from the Outsourcing Journal:

  • WorldCom corporate customers that have a good handle on their telecom services and costs are in the best position to deal with the carrier’s giant bankruptcy. Many of these companies have their telecom house in order thanks to the assistance of a telecommunications expense management outsourcer.
  • An outsourcing partner can prove invaluable to companies hoping to get assistance from the carrier’s besieged customer service workforce. Leading outsourcers typically have multiple contacts within the WorldCom organization, as well as computer screens that match up with the carrier’s, significantly reducing the time and hassle of problem resolution.
  • It is important for WorldCom customers due credits from the carrier to separate those owed prior to the bankruptcy from those emerging post-filing. An outsourcing partner can help establish the demarcation.

About the Author: Ben Trowbridge is an accomplished Outsourcing Consultant with extensive experience in outsourcing and managed services. As a former EY Partner and CEO of Alsbridge, he built successful practices in Transformational Outsourcing, Managed services provider, strategic sourcing, BPO, Cybersecurity Managed Services, and IT Outsourcing. Throughout his career, Ben has advised a broad range of clients on outsourcing and global business services strategy and transactions. As the current CEO of the Outsourcing Center, he provides invaluable insights and guidance to buyers and managed services executives. Contact him at [email protected].

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