As 2010 fast approaches, party leaders increase their pre-election speaking commitments in preparation for the campaign trail. The three party leaders all spoke at the CBI conference last month; Gordon Brown of course focusing on the future and the need for continued investment to stimulate growth, David Cameron highlighting the challenge ahead due to the current financial health of a country with a national debt that has doubled in 5 years and has a predicted annual deficit next year of over £170 billion and Nick Clegg outlining a five step plan to shape a competitive, sustainable economy for the long term. All the leaders urged business leaders to take action and summarised plans for infrastructure developments, government responsibility and ‘back to work schemes’.
The Prime Minister stated that he understood that the government, just like corporations needed, “to develop infrastructure and governance that works across the world; to reduce deficits through a focus on growth and to attract investment.”
David Cameron’s message focused on the need for change through personal responsibility and accountability, through the creation of opportunities for individuals and organisations as a result of government strategies. In addition he emphasised that “as the best businesses know, if you want real change you cannot simply make that happen from the boardroom - you've got to empower people to innovate on the frontline, make every single worker an ally in that change and bring in a new culture that prizes thrift over profligacy.”
In the same week as the leaders took centre stage at the CBI conference, revised figures for the 3rd quarter showed an increase from a 0.4% decline in output to a slightly improved -0.3%. This sixth consecutive period of recession for the UK means that alongside the politicians; economists and business leaders remain focused on one key area: growth. As they enter the New Year, many businesses will be preparing to implement further phases of their recovery strategy and with continuing pressures on budgets, decision makers must persist with cost saving initiatives alongside plans for new business development to increase profitability.
In the telecoms environment both the recession and technological advancements have placed additional demands upon budgets that are already stretched and in some cases shrinking. Whilst some organisations recognise the importance of maintaining, if not increasing, investment in their IT and telecoms network, for other businesses it is this budget that has been amongst the first to be cut during the economic crisis. Although this provides some short term relief on the bottom line, the potential outcome is a technological infrastructure that may struggle to cope with the demands of employees and customers once there is a financial upturn. When the focus should be on campaign activity to re-stimulate sales, developing the IT network could delay take-up and impact heavily on customer service levels.
Furthermore technology continues to move on at speed and the ever growing demands of users has resulted in further complexities with regards to managing telecoms spend, in particular on mobile where non-telecoms related items can now appear on the bill. The mobile phone has long since ceased to be a device used to provide an oral update to the office or home and is now a multi-functional communications tool. Smartphones are becoming increasingly popular and sales are projected to surpass worldwide PC sales by the end of 2011. The users of these and other mobile devices can now download applications pertinent to their work and lifestyle interests, upload photos taken from their handset to social media websites, manage micro-purchases through either the mobile bill or smartcard applications linked to credit cards or current accounts, make small donations to a charity via SMS and of course use them to make the occasional phone call.
Add to this that the run up to Christmas will see an increase in overseas calls to relatives, media uploads and SMS activity including voting for reality TV shows such as Strictly Come Dancing, X-Factor and I’m a Celebrity and it’s evident that telecoms spending will increase during this period. Although the growth in handset ownership means that many employees possess both personal and work mobiles there may still however be occasions when personal activities, such as SMS voting, are undertaken on the business mobile. For the telecoms budget holder, the result of this alongside micro-purchases such as travel costs and parking could mean that significant components of the total telecoms spend are not related to business use telecoms activity.
Thorough and detailed analysis of all telecoms billing will enable the organisation to clearly identify total spend activity including non-business and non-telecoms related. Purchases such as travel and subsistence can be isolated easily and re-allocated to the appropriate cost centre assuring accurate reporting for the telecoms budget holder. With regards to employee personal expenditure, if the organisation does not wish to implement procedures for allocating personal usage back to the individual a communications programme to highlight the impact of non-business spend on company profitability could trigger more responsible call behaviour as employees recognise the importance of protecting the bottom line and perhaps their jobs.
In addition, telecoms budgets subjected to regular scrutiny can identify areas of overspend through inappropriate contracts, discount schemes not applied correctly, costs associated with poor billing processes or even the identification of products and services no longer in use. Telecoms Cost Management expertise has been proven to deliver savings of up to 20% of the annual telecoms spend of a business, a welcome return for any organisation whether corporate or public sector.
Whatever the individual circumstances of the organisation, a new year offers new possibilities. Taking greater control of budgets and gaining improved understanding of spend patterns could support the long term future of the company through the identification of erroneous items and ultimately the freeing up of existing budgets for either improved cash-flow or to utilise on revenue generation projects. The road to financial stability for the UK may be a long one but getting individual organisations in shape and ready to do business en masse again is a priority if this is to be achieved. As the IT/Telecoms budget is one of the top three areas of spend for most organisations, ensuring it is accurate and efficient can contribute significantly to steady growth; an unquestionably positive result for the business and the economy.
