Telecommunications Vendor Contracts: Identifying and Eliminating Threats to Controlling Costs

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Telepresence and Holography / Holograms - November 2008

Editor’s viewpoint on their differences, likenesses and future...

We all just recently viewed an historic CNN holographic interview on an historic Election Night. CNN stated this type of imaging has never been done before on National TV and I believe that. I haven’t seen anything like it. The live interview caught me by surprise and sure had the “wow” factor attached to it didn’t it? Here’s a link to the actual interview.

CNN Hologram Video

The question now has to be asked. Is it Telepresence?

I’m no expert on the subject but I’m going to throw my hat into the ring, go out on a limb and say yes, I believe it is. Although I know many video conferencing purists are rolling their eyes and grabbing their guns right about now with my statement.

While I do know that Telepresence still hasn’t been universally defined (Houston, we have a problem), here’s how I see it…. Broken down to its simplest form - “tele” (through electronic means) and “presence” (present). This is how I’m justifying my opinion by lumping holography and Telepresence together. Just as Telepresence is surely an offshoot of video conferencing, holographic imaging (like we viewed on CNN) surely has to be considered an offshoot of Telepresence. The interviewer was “telepresent” from Chicago and beamed into the CNN Election Headquarters. She was most assuredly - “telepresent”. There was negligible latency, the imaging was fantastic and both interviewers were rehearsed on what they would say. I’ve just recently read that CNN actually “downgraded” the experience to make it “movie” quality and not as good as it could have been. Maybe they thought us mere mortals would be shocked if they showed their complete hand. I have a feeling it was so big to them, they didn’t want it to get upstaged by the historic election. I’m willing to bet we’ll see the “true” power of this technology in the upcoming weeks and months when they can put the pedal to the medal and show it off without having it sidetracked.

What an amazing time for this technology (all differences and opinions aside). Telepresence Doctors, nurses, teachers, schools and healthcare (healthpresence) will benefit from the recent gains in this state-of-the-art industry whether holograms, Telepresence or holography. Airlines also have to see the threat to a portion of their business travel. Hell, who wants go through security and fly to Miami for a two-hour conference when you can look them in the eye via Telepresence?

Beam me up Scotty! Simply amazing…!

Visit the free Telepresence Forum for more information and discussion

Your Editor and Administrator - L II
"Ride on the Next Plane of Existence" TM

Probably more so than with any other administrative service providers, telecommunications vendors benefit from what can be extremely wordy and complex agreements, these benefits coming at the expense of the customer's bottom line profitability. Even under the most deliberate scrutiny by experienced procurement professionals, easy to overlook or seemingly innocuous details can wreak havoc on indirect costs, and eat up any potential gains from preferable service rates. It can be surprising how even the little things can add up to material cost increases in the case of larger customers. Because telecommunications expenses can represent a significant percentage of an organization's indirect cost structure, it is especially important to limit exposure to unnecessary risks posed by vendor tactics. The keys to protecting an organization from these risks are relatively straightforward: ? Learn to recognize unfavorable terms and conditions ? Prepare more favorable terms, conditions and/or contract language ? Exercise the power to negotiate a more favorable agreement

As an example, a major telecommunications provider often uses the tactic of establishing an Effective Date as "the date on which the last party signs this attachment." This allows the vendor complete control over when new pricing takes effect. More favorable language would indicate an effective date of within 6 days, but no more than 30 days, after execution of the agreement by the customer.

Another tactic is limiting the time period (commonly 90 days) in which a customer has to identify and submit for rebate any erroneous charges. More favorable language would indicate a time period of at least the equivalent of the contract term; any additional time will only be to the customer's advantage.

With respect to Rates and Regulatory Surcharges, the language commonly used by providers gives them the power to raise rates with no restrictions in response to FCC rate changes. More favorable language would place a cap on increases of 2-5%, with an option of contract cancellation by the customer if tariffs exceed the indicated cap.

Minimum Annual Revenue Commitments (MARC) expose the customer to charge-back penalties of between 30%-100% if minimums are not met; the most favorable language will indicate the lowest possible penalty. When entering into a new or amended contract with a vendor, make sure that the previous minimums are appropriately adjusted, especially when being offered lower service rates.

When reviewing Discounts, confirm that all specific services are locked in at the preferential rate for the life of the overall agreement, as opposed to less favorable conditions limiting individual service terms.

New contract proposals often include an extensive analysis to support quoted savings. The fact is that these analyses are often inaccurate, and can significantly misrepresent actual savings; a case in point is a proposal by a major vendor which ultimately produced actual savings of a mere $4000, when projected savings were quoted at $2,000,000!

Other items with the potential for disadvantageous terms and conditions include: ? Service outage credits ? Monthly Recurring Charges (MRC) ? Vendor service change notification ? Revenue commitment eligibility ? Service/technology type minimums ? Billing cycle increments ? Custom billing charges

As a final recommendation, it would be advantageous to keep abreast of all new contract language introduced into amendments or other future agreements by your telecommunications vendor, as anything new might pose a threat to the effective management of administrative costs.

? 2007 Profit Recovery Partners, LLC All Rights Reserved

Don Steiner, founder and CEO of Profit Recovery Partners, LLC, is recognized as one of the nation's premiere experts in the area of administrative expense reduction solutions for the Fortune 1000. To contact Don, or for more information on how PRP may help your organization achieve a lean indirect cost structure and improved profit margins in pursuit of competitive advantage, please visit www.prpllc.com. Additional information on the management of administrative costs can be found at http://www.prpllc.com/services.asp

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To learn more about Telepresence, the revolutionary new style of immersive video conferencing; visit these websites:

Telepresence - "Ride on the Next Plane of Existence" - Telepresence
Telepresence Web Portal - Telepresence Internet web portal
Telepresence Report - 24/7 breaking Telepresence related news and information
Via Telepresence - Video conferencing via Telepresence
Telepresence Forum - Free user discussion forum for everything Telepresence related
Telepresence Today - Telepresence information and editor qualified headline news
Telepresence Resource Directory - Telepresence web resource directory
Telepresence Tube - Telepresence videos, pictures and more