Charges for pay-per-use services can add up quickly if they are not monitored and controlled. In times when enterprises are actively seeking cost reductions and optimization, the thought of eliminating pay-per-use services is popular. The question of how to eliminate them in a cost-effective manner is also common. One practice to consider is to directly solicit participation from the pay-per-use offenders. Here’s an example of how this worked for one enterprise.
The company has around 100 employees and spends $800 to $1,000 per month on directory assistance. Countless memos had been issued telling employees that directory assistance from the phone company should only be used as a last resort and on-line telephone number directories should be the first resource. Everyone nodded in agreement, but charges remain the same.
A senior executive told the telecom staff they must reduce the budget and they immediately thought about the struggles with directory assistance charges. The telecom manager then remembered a cost containment program they used to reduce the cost of office supplies. The gist was that all money saved on office supplies over three months would be divided between employees. The office supply program worked and she thought it would work for directory assistance too, so she gained approval to start her own program.
The manager issued a company memo stating that all money saved over the next three months from reducing directory assistance would be given to the employees. She used $1,000 per month as the fixed cost to calculate the savings. Interestingly, the first month charges dropped to $75. The practice stuck and the company’s directory assistance charges are now around $100 per month.
Contact the author at tcolwell@aotmp.com.
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