How to Realize Huge Cost Savings for Enterprise Telecom

How to Realize Huge Cost Savings for Enterprise Telecom

This case study shares the steps taken by Avaya to reduce a sizeable telecom bill by 50%. The methods are trending tactics used by a wide range of organizations, and in combination have proven to produce especially favorable results. Keeping in mind that most IT operation budgets are flat, cost savings of this size can give your organization a greater opportunity to invest in innovation.

When every penny counts, internal telecommunication expenses must be closely accounted for. It’s a large expense and pain point for many organizations, and adopting change in this area is often associated with fear and uncertainty.

In reality, these fears disappear with a pinch of planning and excellent execution. Prioritizing telecom costs as a business initiative, establishing expectations, and determining a reasonable timeframe are some of the leading difficulties in taking on a project of this magnitude. These steps can have a great impact on the overall success of the project.

  1. Hire an expert to properly analyze your costs.

    There are many nuances in telecom, so if your organization does not have an expert internally, then it would be worthwhile to hire a third-party consultant to analyze the cost. They can provide better financial estimates of the cost and savings to ensure adequate ROI.

  2. Centralize trunking.

    To make it simple, paying for fewer circuits reduces cost. At Avaya, we reduced our total internal global telecom costs by 50% and got a 40% overall reduction of IT operational spending by doing so. Pay close attention to the amount of money paid in relation to the locations and compare centralized trunking cost to your current expenses. There are also considerations based on regional laws—for example, telecom laws in India may prevent this practice altogether.

  3. Reduce local trunking.

    Gartner estimates that “network architects and procurement managers can leverage SIP trunking services to slash enterprise telecom expenses by up to 50%.” As we all know, telecom does not come cheap, so these are results that cannot be ignored. Since IT operating budgets are often flat, this method can be a valuable way to extract savings from existing expense.

Gartner further suggests that, “enterprises should leverage the competitive SIP trunking market as U.S. service providers are reducing rates to win new business and retire their legacy TDM networks.” Needless to say, if you have yet to board the SIP train, you should strongly consider doing so now.

Previously at Avaya, all locations had their own local trunking and now we are saving cost by routing calls through a central location. In fact, SIP trunk consolidation provided an average savings of ~40% per month over PSTN trunks. We did it by implementing Avaya Aura to connect sites between a WAN used for both voice and data.

The Benefits Speak for Themselves

Consider what your company could do with these savings. We chose to reinvest 20% of our savings towards innovation and new capabilities. Gaining support from your colleagues should be a bit easier with these proof points in your back pocket and a strategic plan of action.