Berlin Pacific Vendor Management 212-247-2502 sales@berlinpacific.

com
V Vi is si ib bi il li it ty y - - K Ke ey y t to o N Ne et tw wo or rk k C Co os st t M Ma an na ag ge em me en nt t
Visibility is the key to managing any cost, including network costs.
Surprisingly even smaller firms have network management systems that give visibility in to the
network and make tight management possible, yet they arent provided with network cost
management systems that give them visibility in to their costs. This makes optimal management
of the costs impossible and excess spending inevitable.
With networks especially, much of the cost is a sunk cost - the capital spent on buying and
deploying fiber and equipment. Carriers, whose networks are their business, are conscious of the
need to maximize dollars of profit per unit of capacity. (Interestingly some accounting practices
arent congruent with this goal, more on this upon request.)
Many people might assume that all telecom carriers have only labor costs once the equipment is
installed. This would be wrong. In todays world carriers are constantly interconnecting and have
recurring carrier and equipment vendor costs of their own. Wireless firms need a way to
backhaul traffic from their cell towers, and use local low cost providers rather than building their
own capacity every time. In order for us to make long distance and international calls, many
carriers need to be paid. In addition the equipment itself needs support and maintenance from the
manufacturer. All this creates recurring costs for carriers as well as enterprises.
Without Visibility
We know our important services. We usually know what bills pay for services, but little else.
A service can be anything, including a support and maintenance contract, or a voice or data line.
Vendors dont provide consolidated bill break down with a single pane of glass for all vendors.

Operations Finance
Service Cost Bill Cost Bill
Service A ? Bill A
Service B ? Bill A 1000 Total Bill A

Service C ? Bill B 1000 Total Bill B




Berlin Pacific Vendor Management 212-247-2502 sales@berlinpacific.com
Note: Network Management vs. Network Cost Management
Interestingly most firms have a network management system. They usually know full well what
services and devices they have and whether they go up and down. Operations has a very clear
view in to all their devices and carrier services connecting them.
What the systems dont do is tell you the recurring monthly or annual cost of the circuit or the
support and maintenance contract associated with the device and whether youre still being billed
for something that is off your network or unutilized.
With Visibility
Bills are consolidated and broken down.
We can see connections, without always having to look at multiple files, or worse yet flip
through paper bills.
Service Cost Bill
Service A 500 Bill A
Service B 500 Bill A
1000 Total Bill A
Service C 500 Bill B
Service Z 500 Bill B
1000 Total Bill B

Note that there is a service on this list that wasnt on the example list above. This is a service the
firm was paying for that no one wanted, at least not anymore. This happens more often than one
would hope. We regularly find expensive items buried in bills that serve no business purpose.
Given the poor quality of many vendors data, creating visibility can be quite a task in any area,
not just networks. One of the reasons firms use us to help manage their costs is because they
have no one on staff with the time and expertise to take the data they have and put it in a proper
database. Often additional data has to be requested from the vendors themselves.
Since nothing can be managed without visibility, it is usually worth the effort to create it even for
spend categories costing $100,000 a year.
With Visibility
We can manage each cost by:
1. Eliminating or consolidating unused and underutilized services
2. Fixing billing errors



Berlin Pacific Vendor Management 212-247-2502 sales@berlinpacific.com
3. Renegotiating rates
Service
New
Cost Bill
New
Cost Savings Notes
Service A 500 Bill A 350 150 Re-negotiated to market rate
Service B 500 Bill A 350 150 Re-negotiated to market rate
1000 Total Bill A 700 300
Service C 500 Bill B 350 150 Re-negotiated to market rate
Service Z 500 Bill B 0 500 Unused service is removed
1000 Total Bill B 350 650
2000
GRAND
TOTAL 1050 950 almost 50% savings

In the above example we assumed there were no billing errors. We were able to remove the
unused service saving a significant amount. We routinely find many unused services for our
clients, saving a significant portion of their budget. Many costs in the IT and telecom world have
also fallen dramatically, including of course voice and data services. It is also possible to get
lower costs on many IT Support and Maintenance contracts with OEMs like Cisco. With our
connections in the market place were able to routinely roll over and re-negotiate contracts for
our clients at a much lower price point.
Weve seen how with visibility one can manage costs. While the 50% savings above may seem
like an exaggeration, we routinely find those kinds of saving for clients by giving them visibility
and managing their costs for them. Even 20% savings, low for our clients, is a substantial win
with a large enough budget.

Berlin Pacific Vendor Management - Anything Less Is A Waste Of Money.