This month we met with Julie Harrelson, co-founder with Tanya Seda, of Ruby Communications. Ruby Communications is a telecommunications management firm that specializes in eliminating unnecessary costs, increasing efficiencies, and strengthening vendor relationships. Ruby receives no compensation from service providers and serves as an unbiased resource for determining what’s best for its customers.
According to industry analysts, 7 -12% of telecom charges are incorrect. Harrelson told us, “When I tell people that I own a company that helps organizations solve telecom billing problems and develop technology strategies, they invariably respond with a horror story. It’s like having wisdom teeth pulled; everyone knows the pain and it’s not pretty.”
Q. Tell me about your company.
A. We started the company eight years ago. My business partner, Tanya Seda, and I both worked for a competitive local exchange carrier (CLEC). Tanya was a product manager for one of our products. She reviewed and audited the underlying carriers that we used to offer this product and found US$1 million of annualized potential savings. So we realized there was an application for this in the regular business world.
Essentially, we do two things: strategic planning and cost management in the telecom arena. We started out doing just contingency-based auditing of phone bills, what we call cost management. But as the industry changed, we moved from a contingency-based model — where we do a one-time audit — into more of a telecommunications managed services model, where we work with clients on an on-going basis to ensure that their telecom and data services are working as efficiently and as cost-effectively as possible.
Q: Can you give us an example of what that looks like for a client?
A: Sure. One client that we’ve worked with for four years now started out having us do a contingency-based audit. This means we collected their bills and compared them against their contracts, against existing tariffs, and we validated that the services were actually in use. We found more than $150,000 in savings. It’s huge, and pretty much 100 % of the time we find something, some savings.
Q: Why is that? Are the telecom companies ‘cramming’ businesses?
A: On the provider side, billing errors can result for a number of reasons: billing system conversions, mergers and acquisitions, poorly written business rules that introduce errors into the bills. The regulatory issues are also at play. There are various state and federal tariffs that govern how things are priced. Often, the contracts are not in alignment with the tariffs or the tariffs are misapplied to the bills. And there are taxes and surcharges that are governed by various jurisdictions.
On the business side of it, there are simply too many bills that are too large and too complex for people to track and understand. Then you add to that a continuous number of moves, adds, and changes to the service, and it makes following the bill very difficult. Having staff who have the time and the knowledge base to work effectively in all those different arenas is almost impossible to find.
So we tell our clients, let us do that. And in our example from above, they hired us to clean up their billing errors and once we got all that cleaned up, the client said that their network services contracts were getting ready to expire. So we did a review of the client’s business practices, how they deliver service, then we wrote an RFP (Request For Proposal) for data services that the client sent out to providers. We facilitated that process and helped the client make the final selection.
Next, the client wanted to replace their old phone system with an enterprise solution. We wrote the RFP for that and managed that process for the client. Now, they’re engaged with us on a monthly basis to validate that their bills are correct and that everything is in line. You think that once you fix it, it’s fixed, but that’s not the case because of all the various factors that I mentioned.
Q: You must have to audit these bills manually?
A: There are two aspects: some of it is automated — over the years, we’ve developed tools to streamline our analysis. But part of it is interpretive. It’s kind of like going to a medical specialist. You have the tools, say an X-ray, but one physician may be more skilled than another at interpreting the information on the X-ray. That’s how we do it. We have the tools to do the analysis but because the billing issues are systemic, there are many variables that we have to interpret. And there are other factors we have to consider. For instance, we may find some aspect of the telecom service that we think could be disconnected and provide a savings, but for some business reason, the client wants to keep this service. So there is cooperative work involved with the client, ensuring that what we find and recommend is effective for the organization.
Q: I want to touch on something you said earlier. You said you helped your client upgrade their system to an enterprise solution. What’s the difference between what the client had before and what is installed now?
A: They had old phone technology — PBX (Private Branch Exchange) — and they went to a fully converged Voice over Internet Protocol (VoIP) system and Time Division Multiplexing (TDM) solution. The client converted all the company locations to this new technology. They have a 24×7 call center environment and so there was a lot at stake in this change and implementation. The solution allowed them to go beyond traditional call center boundaries and engage home-based agents. The solution also provides multiple levels of survivability in the event of at outage of some kind. The transition had to be seamless so that the client didn’t lose any calls.
Q: Is VoIP stable enough for a call center?
A: Well that’s the million-dollar question, isn’t it? There are certainly many call-intensive environments across the U.S. using VoIP. The thing that I always ask a client up front is why are you choosing this technology? What will this new technology gain your business and what will it cost your business to make this transition? But often one of the first things clients say is, “We want to go with Voice over IP.”
Q: And you ask them why.
A: Yes, because I think it’s important. The question isn’t solely about the technology; the question is, what are the business drivers? What do you want to accomplish with this transition? How do you want to increase your service delivery to your customers? How are you structured? There are all kinds of questions that precede a change in your telecom infrastructure.
When you make a change there are many costs involved in making that change. And my greatest concern when one of my clients implements new technology is organizational change: how is the change going to affect the people using the new tools and systems that we implement. That’s always the biggest thing. At the beginning, management’s concern is how is this going to work and what kind of budget is there, but when it comes down to it, staff and customers may be more concerned about the design of the handset, how the buttons work or the changes to their desktop. Because you can make all these changes, but if the people who use the technology don’t like it, you’re not successful.
We recently completed a project with a school district and before the district ever made any decision about what technology to use, we pulled together a requirements committee that had representation from teachers, maintenance staff, administrative staff, principals, and district staff. So as the district moves forward we have all the input from key players. I think that’s an important part of the strategic use of technology, making sure the right people are involved in creating the plan.
Q: So what does Ruby Communications use in the office? How are you set up?
A: We’re a service business, so we don’t have huge technology requirements. At our office we have a server, desktop and laptop computers, and a VPN connection out to remote staff. The staff at the office really likes that I have this VPN connection because it means I work at home more, and I don’t interrupt their productivity. (Laughs). We outsource our IT management to a great company that specializes in providing Fortune 500-type IT support services to small and medium businesses. It’s fabulous because one of the things that’s true now — even for small businesses — is that we’re reliant on technology. You only have to think about what happens when e-mail goes down. It stops everybody; no one knows what to do. We also have a person on staff who does some of the day-to-day monitoring of systems.
Q: What’s the biggest challenge facing your business right now?
A: For us it’s growth, always growth. When you first start a company and there are only a couple people, you can do things more informally. But as you grow, you have to put systems, tools, processes we document, and all of our customer agreements in place — and all of that becomes more for us to manage. Making decisions on which direction to go is more complex now because we have more at stake. I think in the beginning, you’re just not really aware of how much is at stake.
We’re in the process of shifting our core business model from the contingency audits to telecom services managed solutions. We initially started the contingency audits eight years ago. But things have changed in the market, and organizations have realized that telecom expenses are one of the top five business expenses. They need educated eyes on it all the time. Because we live, breathe and sleep this stuff, we’re there for the clients, resolving issues, and that requires involvement over the long term.
When we go in and do an audit, by the time we’re done we really know the organization we’re working with, how things are done organizationally, how things work technically, how the client manages costs. So it’s been a natural evolution for us to get more involved in the strategic issues.
I spend time both managing my business and working with customers. We keep a fairly tight staff and have not gone after hundreds of clients. We have about 20 customers a year that we work with very closely. All of them have come via referral, word-of-mouth. And when you’re in a service business people like to do business with the partners, the company owners. I’ve always enjoyed helping organizations translate the technology issues and requirements into a solution, so I like working with our customers.
About Ruby Communications
Ruby Communications is a telecommunications management firm that specializes in eliminating unnecessary costs, increasing efficiencies, and strengthening vendor relationships. The company receives no compensation from service providers and serves as an unbiased resource for determining what’s best for its customer. Ruby Communications’ services include telecommunications bill audits, bill review and “clean-up,” tariff management, system configuration counseling, project management for implementation of new services and systems, and strategic planning. Customers comprise a broad array of organizations including United Way, 211 info, The Regence Group, State of Oregon, AAA Oregon/Idaho, and EasyStreet Online Services. You can reach Julie Harrelson at email@example.com. For more information, visit www.rubycommunications.com.