Award winning benchmarking, sourcing and transformation advisory firm, Alsbridge, Inc., today released a report “The Truth About Your International Networking Contract: What You Don’t Know Could Cost You,” which shares insights on how companies can save on their telecom expenditure by paying attention to an important and often ignored element in their networking contracts.
Through the convergence of Voice and Data brought on by MPLS services, Data networks now represent most companies’ largest telecom expense category. Interestingly though, a large component of this spend is often ignored when negotiating WAN telecom carrier contracts. Specifically, we’re talking about the local access (last mile) connections associated with international data locations.
“The carriers have for some time proffered the notion that the rates charged for these local access loops represent merely a pass through charge for them,” says Ben Trowbridge, Chairman and CEO, Alsbridge. “Though this may be hard to believe (coming from a group that charges surcharges for everything from their cost of collecting and remitting USF to their real estate taxes), even if we take them at their word, there is still a large area of potential, and based on Alsbridge’s analysis real, cost variance here.”
First off, if it’s truly only a pass through, then the carriers have no particular incentive to get your costs as low as possible, other than the potential fear of losing out in an RFP environment due to non-competitive pricing. If you’re about to issue an RFP, and you’ve got a fair percentage of international locations, the report suggests including the local foreign carriers in the bidding. They are doing some interesting things in the market. Furthermore, this whitepaper reiterates, in crafting your RFP you may want to include a requirement that the bidder provide who the last mile provider will be for your locations. In your contract, require that your carrier conduct access optimization on an annual basis. Their network reach in foreign countries is always changing and a year or two later may allow for shorter more logical loops.
For further insight into this often ignored component of networking contracts, that can help strengthen your telecom expense budget, download the complete report The Truth about Your International Networking Contract: What You Don’t Know Could Cost You.
About Alsbridge Inc.
Alsbridge provides world class sourcing advisory and benchmarking services for the CIO, CFO and CPO. We’ve helped hundreds of companies reduce costs and get more value from their vendors. Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your vendors. Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, hardware and maintenance, network services, software and maintenance, application support and development, business processes and cloud services. Alsbridge was ranked the #1 outsourcing advisor in the world by the International Association of Outsourcing Professionals (IAOP) based on the value delivered to clients. This commitment to delivering value to our clients has made Alsbridge a distinguished member of the 2010 Inc. 500 fastest growing privately held companies in America.