Part 3: The ABC of Managing the Telecommunications Commodity Group


This is the last article in a series of articles brought to you by SmartProcurement dealing with the ABC of managing your organisation’s telecommunications costs efficiently. Areas to be covered include:

  • A – Awareness:  Being fully informed on this complex and highly technical services commodity group.
  • B – Business Communications:  What are the requirements for your organisation?  Does your present Information & Communications Technology (ICT) infrastructure meet the bill?
  • C – Cut the Cost:  Are you getting enough ‘bang for your buck’, or are you being over-charged due to the inefficiencies and confusion that are rife in this industry?

In the previous article we dealt with the topic of ‘Business Communications’ wherein we discussed the various technological options available to organisations and the benefits that each of these hold.  In this article the focus will fall on ‘Cutting the Costs’ and whether your organisation is getting value and service delivery according to what you are paying.

Cut the Cost – Are you getting enough ‘bang for your buck’?

The Telecommunications Industry in South Africa remains an enigma. We are generally classified as an “Emerging Economy” with many first world features and yet, SA has arguably one of the highest telecomms costs in the world. The answer to this lies in the central monopoly that Telkom enjoys in the fixed line space and in the fact that MTN & Vodacom mainly occupy the cellular space. These dominant positions are entrenched by legislation and an authority, ICASA, that is loath to ‘open’ the market to all, and sluggish in introducing tariff structures that will interfere with the huge profitability of these infrastructure- and network providers.

Because of this, procurement departments and the telecomms spend managers need to fully grasp the regulatory frameworks and vast array of tariff structures which apply, in order to find ways in which to contain and then cut their telephony costs. While not normally defined as a ‘direct expenditure’ by most organisations, telephony is a fundamental cost for all businesses which encompasses a broad spectrum of daily user cost elements viz: Cellular; Fixed Line; Satellite and Wireless; Private Automatic Branch Exchange (PABX); Voice over Internet Protocol (VOIP); International Networks; Voice and Data Transmissions; Hardware, Software & General Services, etc.  What this all points to – as a result of the over-regulation of the SA Telecommunications Industry with its complex structure of tariffs, rebates and discounts – is the almost unavoidable tactic of employing the services of third party specialists in the planning, selecting, implementing and supervising of an organisation’s telephony management.

In the above instance, it is necessary for an organisation to find a suitable starting point in managing this commodity group.  This would usually be in the form of recruiting an impartial third party to conduct a comprehensive audit of the organisation’s entire telecommunications accounts and costs. The next step would be to analyse total expenditure against alternative options and, to adopt the least-cost route available whether cellular or fixed line and, whether local, regional or international.  The good news is that these audit services will pay for themselves based on the retrospective rebates that usually come to light and, to which the organisation were entitled in the first place but, were never made aware of!

If you need any assistance with the above process, simply e-mail SmartProcurement at and we will initiate the process by connecting you with a reliable specialist telephony auditor.  In taking this step you will, at the very least, come away fully informed.

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