Is Your ISP Working for You? Renegotiating Your Connectivity Contracts

Reviewing Your Service Needs

When looking for connectivity contract savings, the first and most vital step is to assess your real requirements. There are many consulting companies available to help with this process. Some companies offer to review your requirements and inventory your current service for a fixed fee, while others will offer to split the savings with you. Several offer a choice dependent upon your specific situation.

No matter what, using a consulting company can still save you because they are familiar with the specific details of the telecom industry and know exactly what to ask for. Remember, telecom companies have been negotiating these agreements for years, so unless you know what you are doing, you’ll automatically be at a disadvantage. Pay attention to the contract’s fine print. For example, substantial late payment penalties can accrue if payment is late, but payment deadlines based on when your company receives the bill will help you avoid the problem.

Here are several guidelines for effectively defining your service needs to gain a better advantage at the negotiating table:

  • The first step is to determine your current and future telecom/connectivity needs. What services do you use today and what will you need in the future? If you are planning to open ten new locations in the near future, include that in your planning. If you will be moving your development offshore, your usage patterns are likely to change drastically. The more you can define your requirements, the more haggling room you will have with the carriers.
  • Do you use services that can be packaged together? Even smaller companies use many types of telecom services, including local exchange, long-distance, Internet access, toll-free 800 numbers, teleconferencing, and high-speed, high-capacity services.
  • Do you have enough traffic to justify a secondary provider? Even the smallest company should have some kind of fallback service, even if it is as rudimentary as a dial-up connection when your main primary ISP is unavailable.
  • Can you afford to be off-line for any significant amount of time? For some companies being off-line can mean millions in lost revenue, so reliable alternative service is mandatory for business survival. If your company absolutely, positively must be connected at all times, you should be looking for redundancy and alternative carriers.

Face it, no modern company of any size can afford to be without phone or data connectivity for more than a few hours. Using these tips when reviewing your company’s connectivity needs will help you quickly identify your potential savings and give you more control when you are bargaining with your providers.

Page 3: The Negotiation Process