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Cost Allocation for Telecommunications

Posted by Patricia Turchyn | September 5, 2012 1:10 PM

Cost Allocation for TelecomNow that you’ve chosen a telecommunications management software, someone will need to get into the nitty-gritty of your telecom inventory. One of the aspects that will have to be looked at, analysed and re-analysed is Cost Allocation. Not only will it have to be analysed from a telecom perspective, but from a finance perspective as well. Do we assign the cell phone (or phone line, or internet line, or circuit) to an employee? Or, do we assign it to a Department? Can an employee become the “owner” of a circuit or fibre optic line?

One of the easiest ways to allocate service costs is by Employee/Department or Site Location.

Why do we have both, you ask? A mobile number, internet line, air card or fax line are individually-ended services: one end of the service is in the hands of a person or department and the other end is in the hands of a provider. Individually-ended services can be assigned to an employee or department. An mpls circuit, a fibre optic line or a frame relay cannot be assigned to one person or even a department so it has to be given a location (site) assignment.

Employee & Department Allocation

Employee/department cost allocation has its benefits: When an employee leaves the company and his/her name is removed from human resources and the information is relayed to the telecommunications management software automatically. All of a sudden the now-ex-employee’s services have no owner.. Well, actually, it will have a new owner – shortly.

It happens like a bungee-cord effect:  the TEM software brings non-owned service(s) to the attention of the telecommunications solution manager, who, in turn, brings it to the attention of the head of that particular department who will tell the solution manager what to do with these now “un-owned” services. This is all done via the click of a mouse.

Whether services need to be cancelled, reassigned or suspended, the system is alerted and will signal a command to take action. We won’t be running up needless costs for months on end until someone realizes that the employee left the company and no one ever cancelled, reassigned or suspended the services.

Master your IT and telecom expenses

Site Allocation

A site location assignment works best when no particular individual owns the service. Take for example, a fibre optic connection between 2 buildings. Does the fibre optic belong to the person or department at building A or building B?

With a telecommunications management solution, the fibre is assigned to one site and related to another site (on the other end). Tagging the 2 locations has another purpose: if one location moves, all its services will be identified (via the TEM software) and will also be moved, reassigned, or cancelled.

So many companies have live services that they never knew still existed! Just think, how much money is going down the drain? Aren’t you curious to know?

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Topics: Telecom Expense Management, Cost Allocation, TEM software, Software

Written by Patricia Turchyn

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