Telecommunications costs continue to rank, and rankle, as one of the top three business expenses. But savings can be made when ITC managers arm themselves with information, scrutinize bills and battle it out when it comes to negotiations.

Business can routinely save up to 10 percent on telecoms expenses with initial savings of about 30 percent by negotiating contracts via request for proposals (RFPs), implementing telecoms expense management packages and expanding communication services to obtain long-term benefits. But cost cutting shouldn't impede company operations and strategies.

BuddeComm telecommunications analyst Paul Budde said to save on telecoms costs, companies need a strategic overview of operations, orientation and expenses.

"First of all, a strategic overview of costs including how much is spent, where and on what should be conducted along with company strategies, operations and customer service," he said.

"Most companies are better bundling their requirements (mobile, PSTN, broadband and so on) because of benefits like reduced vendor management and tariff discounts, but they have difficulty with evaluations because of fixed-to-mobile migration, which should look at the total use and commitment rather than individual deals," Budde said.

"Always ask for separate offerings and get at least three quotes based on specified telecoms invoices from the last three to six months, and remember you need a solution for your situation, not a generic one." Budde said assessing user profiles and trends will suggest whether a bundled plan is appropriate.

Analysts say that internal benchmarks should cover each department and contract and be measured against industry peers.

Telsyte managing director Warren Chaisatien said savings reviews should be done every three to five years or whenever large change occurs.

"Benchmarking is absolutely essential," Chaisatien said. "You should compare against peers and competitors of similar size, telecoms use and infrastructure to assess cost differences; benchmark departments for efficiency and check that your contracts are not costing you more than agreed."

Earlier this year, industry analysts Gartner prepared a report which recommended organizations create a team to undertake assessments. In the report, Gartner analysts Katja Rudd and Leif-Olof Wallin provided the top 10 tips for negotiating voice contracts.

"Create a team that's responsible for managing the entire [contract] negotiating process, beginning with obtaining the current status, through the requirement assessment to the evaluation and selection of the service provider," they said.

"The team should include senior management support and members from the IT organization, HR, legal, finance and possibly third-party consultants.

"The single point of responsibility makes it easier to negotiate contracts and to establish a status of the current position in terms of total fixed and mobile spending, user patterns, and trends," they said.

Rudd and Wallin say the team should be responsible for fixed and mobile voice usage, because this allows business to establish the focus for future negotiations.

In a report on contract negotiation tactics, Gartner analyst Ted Chamberlin said organizations should compose a request for proposal to gather industry pricing, outline communication requirements, asset information, network topology and service needs. He said the RFP should ask:

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