South African businesses are wasting up to 20% of their telecommunications spend every year. This is a staggering R20 billion, and means that for every R5 spent, R1 is being thrown down the drain.
This is according to a whitepaper - Wastage in SA's Telecoms Sector - recently released by telecoms services firm Nebula.
Nebula estimates the telecoms market in SA is worth around R200 billion - equivalent to government's spend on education. "Half of this is business spend and a fifth of this is wasted," says the firm.
Nebula CEO Daniel Nel says there are a number of reasons for the wastage, but primarily, many businesses are unwilling to take a closer look at inefficiencies and wastage in their telecoms systems because of the complexities involved.
"The telecommunications landscape has certainly become more complex, there is a lack of oversight and management of spend by companies, and in some cases there is also simply bad selling by the operators. However, it's a two-way street, and businesses can take ownership of their spend."
Nebula advises waste can be trimmed from 20% of a bill to between 3% and 5%. This is how it says this can be done:
1. Eliminate waste: Remove or consolidate infrastructure and services that are not in use or used infrequently.
2. Improve efficiency: This includes billing accuracy, consumption and configuration anomalies, routing optimisation, contract reviews and unit price optimisation.
3. Operating model alignment: This includes internal and external compliance, centralisation of operations and delivery, financial management and procurement.
4. Sourcing optimisation: Benchmark prices and licences, review contracts for compliance, and look at supplier consolidation or replacement.
5. Technology and service optimisation: Standardise across equipment, support agreements, licence fees, service level agreements, connectivity, etc. This also looks at how the company evaluates the introduction of new technology.
6. Don't go it alone: Partner with an independent expert - not aligned to any service provider - who has the knowledge, experience and tools to assist you.
"By removing complexity and constrained telecoms thinking, and introducing simplicity and unconstrained telecoms thinking, telecommunications can become an essential vehicle for a business's growth, rather than an expense," says Nel.
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