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What is Telecommunications Cost Management?

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  • Written By: D. Nelson
  • Edited By: M. C. Hughes
  • Last Modified Date: 05 November 2016
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Telecommunications refers to any kind of communication that permits information to be transmitted across a long distance. Some example of telecommunications are telephone services, the Internet, video conferencing, and even telegraphs. In the world of business, telecommunications are used in order to communicate with colleagues, coworkers, and clients. Telecommunications cost management refers to the analysis and optimization of expenses related to telecommunications. Professionals who engage in this practice tend to focus on the costs of various services, the cost for purchasing and maintaining hardware and other telecommunications devices, and the auditing of telecommunications bills.

In many cases, businesses that utilize telecommunications services have a choice of a number of different service providers. Some providers offer services for telephone, Internet, and other related capabilities. Telecommunications cost management may involve the act of pricing various services for affordability, as well as comparing the level of quality and reliability of service. For example, a service provider may offer low monthly charges for Internet connectivity, but if a connection is slow or drops out, this can lead to a loss of profits for the client business, which would make a use of a service provider less cost efficient.

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Telecommunications cost management can also focus on the cost of purchasing and maintaining relevant hardware and devices. These devices may be items such as computers, telephones, fax machines, and any other piece of equipment or accessory that plays a part in telecommunications processes. A professional who practices cost management related to these physical components might analyze the initial price of purchase versus the quality of the products and the cost for repair and parts. As with telecommunications cost management related to service providers, a cheaply purchased item may cost more in the long-term if it breaks down and requires much work that leads to increased repair costs and potential loss of profits.

Auditing may be another important factor in telecommunications cost management. This can be the process of evaluating how money put toward expenses is distributed and how inventory is being used. Telecommunications cost management auditing is often used as a way for businesses and other organizations to achieve a higher level of transparency in seeing how they pay for their telecommunications services. Professionals in larger companies and firms with many pieces of equipment and a number of different locations and entities may often find that it is difficult to achieve a clear understanding of how expenses and telecommunication services and equipment are being put to use. An effective audit can reveal opportunities for decreasing cost and allow opportunity for optimization of telecommunication services.

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