Why cost efficiencies are more important than cost savings

All too often, people confuse cost savings with cost efficiencies. Especially when it comes to telecoms expense management. When auditing their telecoms environment, these people focus all of their attention on reducing costs.

Let’s imagine something costs me R100 to produce. When I’m focused on cost savings, I’ll come up with a variety of ways to reduce that amount. Which is a fair enough approach. But how sustainable is it?

And here’s where the real difference comes in. When you focus on cost efficiencies, you don’t try to reduce the R100 you spend; you just aim to use that R100 more efficiently to produce a better product. And in order to do so, you need to run your business well.

Here’s a great example.

A large enterprise with 4000 employees is looking to reign in their monthly telecoms bill. When focused on cost savings, the company will cut down the number of SIM cards issued, the amount of data being used and will restrict access to certain data-heavy productivity apps. While this may reduce their bill at the end of the month, you have to question how this move will affect their staff’s ability to get their jobs done.

When working towards cost efficiencies – the company will monitor usage and costs with live analytics to ensure everyone has the packages they need to be most productive. And in being more productive, these staff members are indirectly helping the business be more profitable because they’ve got the tools to do their jobs faster and more effectively. This is where cloud-based telecoms expense management comes in.

Take the decision to block productivity apps mentioned in the example above. With the right telecoms expense management platform, you can guarantee that every employee has a mobile package best suited to support the use of these applications.

You can also activate alerts to warn people when they’re using excessive amounts of data and set up the necessary top ups so they aren’t charged out of bundle rates when their data runs out. This way, employees are more efficient and don’t have to worry about how much money their activities could cost. And as they are “productivity” apps, these will help people do their jobs better and complete tasks in less time.

Ultimately, it comes down to improving how the you do business. Yes, curbing use will cut costs but when your telecoms expense management partner is also a strategic business partner you’ll have all the information you need to make your entire operation more efficient.

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