I have long stood by my conclusion that the most challenging aspect of strategic sourcing in the world of telecommunications is not network design, nor negotiation , nor understanding contract terms, SLAs, tariffs, and service guides, nor migration management, but being able to call a project complete by confirming that the invoicing is correct. Why? The invoicing is never correct, certainly not in the first bill cycle and probably not during the second, either. Not completely, anyway. This is no secret, an entire Telecom Expense Management (TEM) industry was spawned from and has thrived due to telecom providers' inability to get their own billing correct.

I am willing to give the providers the benefit of the doubt only in that most providers are the products of various mergers, acquisitions, divestitures, re-merges, etc. Both their networks and billing systems are legacy and poorly integrated. There is bureaucracy on top of bureaucracy layered throughout most organizations leaving the customer feel like they are playing a childhood game of "telephone" (no pun intended) with their provider. The customer may ask for a circuit to be disconnected, for example. Maybe the disconnect group will actually get the message (hopefully in a reasonable amount of time) but will the billing group? Maybe, maybe not? How long will it take for the customer to realize that the circuit that has been disconnected and is unusable has still been billing because the provider's billing team never got the message, or never worked the order?

But beyond the poor integration and the bureaucracy, there is a big problem when telecom giants allow glaringly obvious errors to occur. For example, I cannot count the times I have audited carrier invoices for new clients where there are no actual charges for services on an invoice -nothing at all billing on the account. Why is there an invoice? Well, because the carrier needs a place to bill their invoice charge. Plus taxes and surcharges of course. That's right, an invoice generated and sent to the customer to bill the customer for that exact invoice being generated and sent to them.

For another customer, a credit of a certain dollar value was written into a network agreement. The credit was clearly demonstrated in the agreement and was identified in very explicit terms that it would be issued the fourth bill cycle after the effective date. Despite our babysitting and notification to the account team (who did make a great and sincere effort on our behalf) prior to the fourth bill cycle -we did not receive the credit until the sixth cycle due to internal debate over when and how the credit should be issued. As it turns out, without our babysitting it would have taken even longer because there is a manual internal mechanism to start the process that no one on the account team was aware of.

Despite most telecom invoicing being fairly simple -even most large networks only typically have a few dozen billable elements- carriers struggle with it where much more complex projects in other industries seem to manage just fine. In order to realize the savings you have negotiated you need to carefully manage your carriers. Typically engaging directly with the billing team throughout the negotiation and immediately thereafter can pay significant dividends. Most of the big players (who seem to have more trouble billing correctly than the smaller ones) have dedicated folks available to ensure billing is correct. Depending on your account size, they may or may not be made available to you without your asking for them. This may be something you ask during a negotiation and can pay huge dividends in terms of the costs you and your team will have in long term management of incorrect billing: continual auditing of invoices and chasing the carriers for credits. Further, engaging billing earlier will allow you to track their progress. If they come up short and don't get all of your negotiated rates in place in time for your invoice, they can immediate take corrective action for the next cycle and do most of the grunt work (which you should audit) in terms of calculating the credits due on the next invoice as well.

Telecom billing is a extraordinarily difficult to understand completely and manage closely. To do so is extremely time consuming and that is usually time you and your team do not have. But it's a necessary evil -even once things are correctly billing, they need to be tracked because they will almost inevitably bill erroneously for one reason or another in the future. Without close management of your providers and your invoicing, all that hard work you put into your RFP and negotiation may be left fruitless. Source One can help your organization not only improve pricing, but make sure the pricing bills correctly and stays correct.
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David Pastore

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