7 Tips to Negotiate Telecommunication Contracts

Negotiating telecommunication contracts can open the doors to significant savings, and so a telecom audit is inevitable in today’s business to ensure economic business functioning and profitability. Technical knowledge and skills, which are of great advantage when it comes to determining the price to pay, are a must to negotiate a good contract. It is essential to negotiate skilfully, without compromising on the level of service, to reduce carrier margins and save money. Cost-effectiveness alone is not the keyword to negotiating telecommunication contracts; reliability of services is of prime importance while drawing contracts. Moreover, emphasis should also be given to future flexibility to adapt to change in technology as businesses are willing to pay a bit more if it meant access to more advanced features that would accentuate and improve the way they do their business.

Before entering into the process of negotiation of contract, the requirements in terms of services and equipments should be ascertained. There are a lot of details to decide like the number of devices to be supported, the applications to support, the procurement and maintenance of equipment and accessories, the types of voice and data services required, etc. Determining the indispensable services is an essential step to be completed with due diligence before starting the negotiations. Inventory and traffic patterns, as well as other pertinent information that will help a carrier price out the network effectively, should be determined. Depending upon the number of carriers used, a contract that can save a very significant percentage of the money previously set aside for telecom services can be negotiated. Once the requirements are well defined, one should analyse the different service providers and draw the contract with a suitable service provider.

The points to be borne in mind while drawing a contract are:

First, the period of contract should not be very long. Prices keep changing very often and it is never good to have a fixed price over a long period as competitive prices would be available in future. It is best to make use of the opportunity.

Second, carrier usage requirements will change. So it is best to make a contract which is flexible and not committed to a particular service. There should always be possibilities to incorporate changes.

Third, analyse the situation well before an existing contract ends and determine what would be best in the interests of the business, accordingly choose you future contract.

Fourth, several extension offers can be made for the expiring contract, So it is essential not to make a hasty decision, but analyse the impact of the contract over the extended period.

Fifth, hidden costs in the contracts should be uncovered and if possible previous overcharges should be recouped.

Sixth, appropriate language should be used to draw up a legal contract. It will be beneficial to review the contract with and attorney or the legal advisory department if you have one.

Seventh, sufficient time should be taken to do the analysis and decide on the contract.

Some companies specialize in negotiating and maintaining contracts. The services of such companies can also be utilized. When skilfully negotiated, telecommunication contracts greatly help in the effective functioning of a business.

What You Should Know About Hosted Phone Systems

The phone system we use has a big impact on the profitability of our company as the role it plays in communications, customer relationships, vendor contacts, and employee productivity is highly significant to our company. We should ensure that it delivers all the services that are required for the successful functioning of our company and the costs incurred for the maintenance of the phone system are within our budget. Hosted phone system has become the choice of every company as it provides the functionality of an on-site PBX with the cost savings of VoIP and the simplicity of a normal phone system.

In a hosted phone system, the equipment that your company uses is housed at the provider’s data centre and hence the name hosted phone system. So there is no need for the company to own equipment, such as a phone cabinet and routing software, which results in cost savings. High-speed Internet connection or a T-1 phone line is used to route calls to your business. Bandwidth for phone calls and data transfers can be designated as per your business requirements to ensure call quality. Hosted systems range from basic, VoIP-type systems where software can be downloaded in a few minutes to “enterprise grade” systems that require VoIP adaptors or phones.

Calls can be routed through a “dedicated connection,” or a T-1 line, or the “open internet” and a dedicated connection definitely produces better call quality, but is much more expensive than routing calls using an open Internet connection.

Usually service contracts or month-to-month agreements are made with providers. Month-to-month services are typically used by smaller businesses. The provider provides the software for a small phone system which can be downloaded from the provider’s Web site and installed within a few minutes. Phones are the only equipment that will be needed. Contract services operate more like traditional phone system services: the contract specifies acceptable downtime, service offerings, maintenance, and other costs in advance.

The advantages of using a hosted phone system are that there is no requirement for on-site hardware. Thereby the capital outlay for phone equipments is minimized. This is best suited for small- and medium-sized enterprises (SMEs) which can enjoy the benefits of a state-of -the-art phone system without investing on expensive equipments, routing software, equipment maintenance, skilled manpower, office space, etc. All you need to do is pay a low fee on a monthly or contract basis to reap such great benefits where a virtual office environment for dispersed users, with highly scalable and flexible hosted phone systems, is created.

The disadvantages of hosted phone system are that dedicated lines are expensive and open Internet lines are not secure. Routing calls over the Internet can be more cost-effective, but it can lead to security problems for some companies if calls are not protected with a firewall or encryption protocol. Moreover, the quality of the call is also to be considered in the case of open Internet lines. But the cost-effectiveness and simplicity of usage definitely outweigh the problems of insecurity and poor call quality of lines, and therefore hosted phone systems are becoming more and more popular among small- and medium-sized businesses.