The Audit/Analysis Process
There are many aspects of a successful of audit initiative; these are some of the most important, straight forward, yet basic areas. Every telecommunication auditor knows how to perform these functions, but how many have the discipline to carry it through to every TN. These highlighted areas the basis of my process/discipline/approach to a Telecommunication Audit.
Inventory
The center of the universe is the inventory. You cannot audit or analyze what you do not know exists. It is critical to have a central repository of every circuit, service, router, PBX, phone number, order, invoice, etc. It is also critical to know the configuration, the purpose is, and the relationship to all the other inventory elements.
Order/Provision
Once you have an inventory, it is critical to keep it accurate. In order to do this is to practice a process (discipline) to enter items into the inventory, change those items, and eventually remove those items from inventory. Order or provisioning management is an area that can benefit from specialized “software” to provide defined workflow to enforce the rules for how inventory updates happen. A standardize ordering/provisioning process will help ensure the accuracy of the inventory, but also provide on data the process…how it works, how it breaks down, who is fast, who is slow, how long does it takes each carrier from request to completion.
Financial
The basic financial function is paying the bill in order to keep the service on. It includes the cost of operating the voice and data network and allocating that cost back to the various users. The Audit/Analysis function is to validate what is being used, this means checking each line item from invoices and comparing them to the inventory. Another part is validating that the amount billed is accurate by checking the elements of the bill against the configuration of the telecom service, the tariff, and the contract on a monthly basis. The next part involves the Audit/Analysis of the allocation of costs to the users within the organization. Allocation can be straightforward, a telephone monthly charge is a simple matter of taking the charge for that telephone number, or circuit and charging it back to the office or location that uses the service. In the case of network utilization, one needs to determine circuit use.
Contract/Tariffs
Contracts contain the terms and conditions of the customer’s relationship with their carriers. Part of the audit process is to ensure that the customer and carrier meet the terms and conditions, like annual commitments, and service level agreements. The most obvious part of your contract is price, making sure you are being billed the correct amount specified in the contract. However, in addition to your contract is the tariff. Many items in a telecom inventory are not in the contract, many components default to tariff, or a specific product pricing. This becomes a more complex endeavor when you have service in multiple states.
Optimization
Telecom optimization leverages all the information in the audit database, circuit and line inventory, equipment inventory, monthly recurring charges, usage, and ring down to each TN to design the Optimal configuration… for the most economical price. A locations or offices telecom needs can expand and shrink over the course of a business cycle or technological change. In a business expansion adding lines and capacity is inevitable, in a contraction or technology shift, a location can have idle or stranded inventory. Optimization of an existing location is not too many lines, not to few, but just right.
Implementation, Resolution and Result
The result of the audit is a function of discipline, commitment, ability, and willingness to carry the process down to every bill and carrier. Often the success of an audit of depends on the attention one gives to even the smallest of components; this is especially true when an organization has locations with a mix of services like Centrex, PRI, Super trunk, POTS, etc.
Refunds, everyone likes them, because it is like getting an Income Tax Refund, auditors like them because they are a cost effective (time is money) to show results. Refunds of any size are great, but they are one-time items, foot noted in the income statement.
Savings are; reducing costs and overhead, eliminating waste, identifying stranded assets, streamlining, spending less for the same result. Finding and delivering on going savings, to me, is the most exciting, challenging and rewarding of part of an audit.
Paying the bill on time to avoid late charges is its own challenge for Accounts Payable, the audit function here is to ensure accuracy of the cost allocation or charge back.
One of the least time consuming parts of the process is to identify errors. One of the most time consuming components is to properly document and submit a claim, then track those claims through to resolution (and perhaps some negation) then verify credit on the invoice, and ensure that the billing is correct.
Which would be the better choice, A PRI or Centrex? I do not know which option I would recommend until I have performed a “what if” analysis. To me part of the audit process to take the data collected during audit then analyze the data to budget, forecast telecom spends; perform “what If” analysis for issues like carrier conversions, equipment upgrades, or contractual terms.
In my experience, the areas that dog many organizations are a lack of a cohesive service order process and a lack of clean inventory.
Many organizations feel that a software solution would eliminate this problem, and for many organizations, it does meet that need. However, I never cease to be amazed when I see this specialty software sitting on some organization’s system either not used or under utilized.
As an auditor who enjoys what he does, I can go on about Implementation, Resolution, Result, and the various ways, carriers structure their bills, contracts, and tariffs.
What you want to know is, how am I are going to tackle the specific work that you need done and can I successfully perform all the processes to obtain the optimum result for you.