Essential Technology

Roping Telecom Chaos

Most companies mismanage telecom expenses and planning—and are now asking the CIO to fix the problem. Here's how to take stock and clean up the mess.

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By Galen Gruman

May 15, 2007 — CIO — When Craig Haught signed on as VP and CIO for lithographic equipment manufacturer Cymer in June 2006, he learned the nasty truth about telecom: No one was really in charge. There was no strategy in place to ensure that costs were controlled, that inventory was managed and—perhaps most critically for the CIO—no way that IT could develop and deploy effective strategies involving telecommunications.

It's a huge issue, yet nearly two-thirds of companies—65 percent—don't have a handle on their telecom expenses or inventory. And almost half have no way to automate the management of telecom assets, according to Aberdeen Group research.

"Enterprises have a very disjointed process for managing telecom, often with an inadequate understanding of their processes and goals," says Joe Basili, a research director at Aberdeen Group.

To corral this telecom chaos, enterprises have been shifting responsibility for telecom to the CIO. In fact, Aberdeen's surveys show that 64 percent of enterprises have moved telecom into IT's purview in recent years. (The finance department handles telecom expenses at 20 percent of companies, operations handle them at 11 percent and other groups handle them at the rest.)

What do you need to know as CIO as telecom moves onto your plate? For starters, you'll want to think bigger than budget. Certainly, you can realize cost savings by managing telecom adroitly: Telecoms typically overcharge companies by 5 percent to 10 percent, analysts say.

"But I don't want to just count beans," says Cymer's Haught. "I want to develop a catalog of services and provision better services," he says.

Joel Wiens likewise took on a fragmented telecom environment at his company, hair salon franchisor Regis, where he is VP of IT. "No one had the whole picture," he says. "But I saw telecom as an extension of what we're doing in IT, such as managing point-of-sales data."

Among the hurdles, effective telecom management requires an understanding of the contracts, bills and service-level agreements; the resources to manage the inventory of devices and lines internally; and the expertise to manage support and billing issues with the carriers. "It's an administration-intensive job," says Haught.

That's why most enterprises look to hire an outside firm to help manage telecom services. And before they can do so, they have to get their internal house in order, Basili warns. Haught faced this dilemma: As with poorly designed, or "spaghetti," code, Haught couldn't tell where one thing began and another ended in his company's telecom, or understand the logic.