Auditing services cut telecom costs - Page 3

The audit process

After identifying potential discrepancies, the auditor and its customer sign an agreement that defines what percentage of the savings will go to the auditor (usually ranging from 25% to 50%) and what will go to the client. The fee is usually based on past overcharges but sometime can include a percentage of future savings.

To start an audit, a company has to sign a letter of authorization so the carrier understands that the auditor is working on the company's behalf. The auditor also requires a list of the company's account information and recent bills.

When first contacted about an audit, a telco can become defensive. A lot of the carriers look at us with suspicion, said Communications Audit Service's Rowen. They are afraid that we will come in and convince their customers to switch to another carrier. The telco may also offer a high degree of cooperation. One carrier recommended us to one of its customers that needed to fine-tune its network, said Tele Guard System's Laws.

Once a company completes an audit, the next question is how long it should wait before conducting its next one. The frequency of telecom audits depends on how much flux there is in the company network, said Tele Guard's Law. If a firm goes through a rapid expansion or dramatic corporate changes, such as mergers or acquisitions, then it may want to conduct an audit every 12 months. If there are fewer changes, then the process should be done every 24 months.

An underused service

Although telecommunications auditing services can be helpful, they are not widely used. Few IT departments are aware of billing problems and even fewer know that there are firms that specialize in fixing them.

One reason for this low usage is that few companies offer such services--a dozen or so nationwide. This is the case partly because the skills needed to sift through bills and identify mistakes are rare. After working at AT&T for 14 years, I had a good understanding of how its billing systems functioned but it's certainly not the type of knowledge one easily picks up, said Tele Guard's Law.

Another issue is that telecom managers often don't want it known that they really don't understand the company's bills. Certain managers are afraid that they will be viewed as incompetent if they call too much attention to their firms' billing problems, said Communications Audit Service's Rowen.

Another limitation is that services currently are geared only for domestic services, not international ones. We have a number of international lines and would like audit them but have been unable to find a firm that focuses on this market, said GlaxoWellcome's Blanchard. //

Paul Korzeniowski is a freelance writer in Sudbury, Mass., and specializes in networking and telecommunications issues. His electronic mail address is paulkorzen@aol.com.