Telecommunications Audit and Optimization High Impact Global Business Solutions A thoughtful Audit and Optimization process enables organizations to implement a closed-loop telecom expense management process, resulting in greater control and deeper cost reductions. In a 2004 research report, Gartner states, "For most companies, telecom costs are rarely audited, and most companies only maintain minimal resources to manage their telecom life cycle requirements. The greatest appeal for TEM solutions is the improved governance for telecom management and a proven record of cost reduction for telecom spending." True telecom phone bill audit expertise is only gained by years of experience and tenure within the telecommunications industry. Audit and Optimization Overview A thoughtful Audit and Optimization process enables organizations to implement a closed-loop telecom expense management process, resulting in greater control and deeper cost reductions. No matter where an organization stands in implementing expense management best practices, the expertise, processes and technology of a qualified telecommunications expense management (TEM) provider can help achieve the next level of management and savings. From managing assets to analyzing service provider invoices, a reputable TEM provider can deliver global insight into what transactions are made within an organization – and at what cost. Automated Tool Required When searching for a TEM provider with audit and optimization experience, make certain they have a proven track record and are proficient in specific fields, such as local service, data, long distance, and wireless. Their team should also include a CPA experienced in telecom tax relief opportunities and a legal partner to facilitate litigation if required. Their team should utilize a blend of technology and industry knowledge to provide clients with optimal results. The TEM provider should utilize an automated toolkit, developed with input from clients and vendors to provide organizations with customized client-specific data to help manage complex telecom solutions. This tool should combine Customer Service Record (CSR) details with invoice information from all client vendors whether local, long distance, data, wireless, internet, or cable. The information should be standardized across vendors to provide a manageable resource for inventory by location. In addition to managing assets, the data should be used for identifying cost savings and optimizations. Building an Accurate Inventory The process of developing an accurate base inventory is integral to receiving the cost-saving benefits of audit and optimization. The first step in performing a successful audit is to establish what telecom services are in place at each location and what the cost is for each component. This objective is achieved through the creation of a detailed telecommunications inventory. The most accurate form of telecom inventory is one based on and created electronically from the local exchange carriers Customer Service Records. The inventory will provide the most accurate and detailed information and will be the cornerstone in beginning the audit process. It should contain detail down to the USOC level and be available for comprehensive query. The data should be able to be queried to gain visibility to cost variances and validation of service level components, including but not limited to items such as lines, circuits, features, USOCs, taxes, fees, and PICs. Inventory information can be further refined by conducting a physical inventory. This process involves inspecting each facility to determine what telephone assets are installed and in use. Identifying Discrepancies Once the inventory has been built with Customer Service Records, the TEM provider will evaluate this data by comparing it with the invoices, and the client/vendor term agreements, tariffs, service guides and contracts. All invoices should also be loaded into the automated tool electronically via EDI, CD, Web-billing, or OCR applications, and manually if electronic data is not available. Typically, invoice rates are compared to the CSR rates for accuracy. These comparisons will identify discrepancies in the monthly recurring charges. The tool gives the TEM provider the ability to design and execute an array of queries. The ability to analyze at a granular level will be essential. Detail charges can also be evaluated, such as other vendor charges, usage, government fees and surcharges, federal, state, or local taxes. With this information, features or components not required can be itemized and easily identified for removal. Charges by other vendors when not authorized, required, or needed may also be eliminated. In addition, inappropriate taxes can be flagged for dispute. These are just a few examples of the types of exceptions which such a tool can identify. After these initial steps are completed, you can ask your TEM provider to review your contracts and compare them to both the invoices and inventory for compliance with the contracted rates and discounts. You should request a detailed report of the findings, as well as an account status report defining whether the accounts are currently contracted, not under contract, meeting contractual obligations, or if the contract is about to expire. You should expect your TEM provider to provide you with their best recommendations, and to assist with the negotiation of new contracts or agreements based upon the knowledge obtained from the client inventory, invoices, and contract reviews. Line verification should be completed based upon the inventory of billing telephone numbers and working telephone numbers obtained from the inventory. A query can be run to provide a list of these numbers, and then each should be called to determine if they belong to the client. A detailed analysis should be be provided showing the results. Any billing errors, items requiring investigation, or contract disputes should be addressed with the vendor, and followed through to resolution and verification of appropriate savings and/or credits to the satisfaction of our client. Federal Excise Tax Refund Review Federal law (IRC Sec. 4251) imposes a three (3%) percent federal communications excise tax (FET) on amounts paid for communications services, including local telephone service and toll (long distance) telephone services. The subscriber pays the tax to the communications service provider who, in turn, remits it to the IRS. Most consumers of voice long distance services, including 800 service, purchase such services under a "postalized" rate plan. A "postalized" rate plan is where the service is billed on a per minute price that does not vary based on the distance of the call. Conversely, IRC Sec. 4251 defines toll telephone service as that for which the rate varies based on elapsed time and distance of the individual call. Consequently, a postalized rate plan, by its very nature, does not meet the definition of a taxable toll telephone service. A few TEM providers offer a Federal Excise Tax Refund Review which seeks to obtain refunds of the federal excise tax based on the mismatch of tax law and the ever-changing practices of the telecommunications industry. In particular, refund opportunities exist with respect to 800 services, postalized rate services, wireless, and virtual private networks. Recently a number of taxpayers have successfully litigated this matter and, accordingly, it is conceivable that the Internal Revenue Service may eventually allow full refunds of the tax. In order to expedite the process of converting refund claims to cash, some TEM providers have partnered with law firms to not only prepare and file claims, but also try cases in court to arrive at the most optimal and expedient outcome. Carriers are required to file FET returns (Form 720) on a quarterly basis. The statute of limitations, as it relates to FET, is three years. Accordingly, claims for refund of FET (Form 8849) are required to be filed no later than one month after the end of a calendar quarter for that period three years ago. Therefore, we recommend that taxpayers file refund claims for all open periods to protect any periods from expiring due to the statute of limitations. A suit may be brought against the IRS six months from the date that a refund claim is filed. Fund Eligibility Analysis There are other ways to find opportunities for cost savings which you may not have realized. If your organization is a hospital, school, library or rural telecom provider, you may be eligible for Federal or State funds designed to subsidize your telecommunications budget. A few TEM providers have the specialized expertise to assist clients in maximizing their benefits from programs such as The Federal Universal Service Fund, State Universal Service Funds, Telecommunications Infrastructure Funds, as well as other Federal or State grant programs. The administrative burden of determining eligibility, completing applications, gathering and providing all required documentation, completing audits, coordinating with carrier vendors, and confirming that all funds are received and credits applied in a timely manner is enough to discourage many eligible would-be recipients from participating in these programs. Many organizations are forced to hire full-time professionals just to handle the administrative burden of participating in these programs, or alternatively the task is relegated to an already fully utilized employee who may not be able to give the attention necessary to insure maximum benefits are received. In either case your TEM provider can leverage their collective skills and knowledge for the benefit of multiple clients thereby reducing costs and maximizing the receipt of funds. If you are unsure as to whether your organization is eligible to receive funds from these programs, request a Fund Eligibility Analysis from your TEM provider to answer this question. This is essentially the first step in the process and they should be able to provide an estimate of available funds for your organization. Symphony Spend Management Solutions at a Glance Founded in 2002 Top-Notch Staff and Quality Process Maturity Rated at CMMI Level 4 Strong Financial Backers Primary Financiers are TH Lee Putnam Ventures and Symphony Technology Group Global Secure Infrastructure Acquisitions 2002: Telco Research (originally founded in 1975) 2003: Teletron (originally founded in 1989) 2004: Stonehouse Technologies, Inc. (originally founded in 1978) Our Telecom Expense Management enables organizations to implement a closed-loop expense management process, resulting in greater control and cost reductions. No matter where an organization stands in implementing expense management best practices, Symphony SMS' expertise, processes and technology can help achieve the next level of management and savings. From managing assets to analyzing service provider invoices, Symphony SMS delivers global insight into what transactions are made within an organization – and at what cost. Our Telecom Expense Management has over 300 clients spanning various industries, such as financial services, manufacturing, hospitality, retail, consumer products and pharmaceutical. Our clients include: 4 of the top 5 commercial banks 3 of the top 5 telecommunications providers 3 of the top 5 aerospace and defense manufacturers 3 of the top 5 motor vehicles and parts manufacturers 3 of the top 5 pharmaceutical companies 2 of the top 5 beverage companies 2 of the top 5 forest and paper products companies 2 of the top 5 diversified financials companies Contact Details: To talk about how your business can benefit by working with Symphony SMS, contact us at: Symphony Spend Management Solutions SMS-Sales@Symphonysms.com www.symphonysms.com

Telecommunications Contract Management: Big Savings To Be Found Continuous management of your telecom contracts can help you reduce the costs of your telecom and IT services and make sure that you gainthe most from the contract. Can you answer these questions? § Where are your telecom contracts? § What are your current contract rates? Your telecom contract documents usually end up in a file either in the AP or Legal Department and are forgotten until the contract comes up for renewal. There are many ins and outs within telecom contracts and they can be quite complicated and confusing. You may also run into big spend results if these contracts are not managed and monitored on a regular basis. Continuous management of your telecom contracts can help you reduce the costs of your telecom and IT services and make sure that you gain the most from the contract. Knowing your current contract will also help when it is time to renegotiate the terms. Knowing how to Negotiate your Contract You must really be on your toes when negotiating a telecom contract. If you are not up-to-date on your knowledge of the telecom industry, you could negotiate away huge savings opportunities that could affect your competitiveness in the marketplace and incur penalties that could take a a big chunk out of your bottom line. It is important you have a plan for negotiating your contract with your telecom vendor. You need to be aware of any clauses that state your contract will automatically renew after a period of time which could lock you into another contract which may not suit your business needs. Telecom contracts almost always favor the telecom vendor. Therefore, you should negotiate for flexible clauses and high commitment levels from your vendor. Know the current rates and trends before you sit down with the vendor to negotiate. Be ready to guide the vendor in the direction of the rates that would most benefit your business savings. Always keep in mind, no matter how large your company may be, this will not sway the telecom vendor to give you the better rates. The telecom vendor is out to give you the highest rate that will yield them the most profit. In order to be better prepared for your telecom contract negotiation, you should already know what your current usage and spend are and you should know the regulations and rules for your area. Do not rely on the vendor to supply you with this information, as they may mislead you on the numbers and put you in a costly situation later. You will also need to consider future changes that may take place during your contract term that could run you into big spending if there is no mention of future growth already in your contract. You are dealing with people that know how to build a contract to their advantage and know how to input terms that will give them back the savings you think you have negotiated in a lower rate. When it is time to start negotiating your contract, it is imperative the you have knowledge of what your specific needs are so that you are able to lay these out in your request for a proposal. A good request for proposal will dictate to the telecom vendor: what services you expect from them, what rate you are willing to pay, and specific pricing caps. Starting your negotiation at a lower level will ensure flexibility throughout the negotiations. It would also benefit you to negotiate the time period allowable for implementation. In this way, you stay in control when you enter the implementation phase of managing your telecom contract. You must not forget to leave room for technology changes, company structure changes, etc. Another important step in requesting a proposal for your telecom services is asking detailed questions concerning your specific needs for your equipment and software. Once you have received the vendor proposals, it can be a very overwhelming and tedious task to analyze the responses. Therefore, you should also specify the format in which you wish the vendors to respond. This will make it much easier for you to sort out the differences among vendors. The telecom world is constantly changing, and contracts are far from standard. The more knowledge you have on current trends and vendor processes, the better prepared you will be for the Request for Proposal step of negotiating your contract. You can lose up to 20% of potential savings if your telecom contract is not negotiated properly. Entering into telecom contract negotiations without being full knowledgeable of these factors can cost your business severely. Knowing how to Implement your Contract Now that you have your contact negotiated, it is time to enter the implementation phase. If you do not take full control of the implementation phase of your telecom contract, you may not receive the services for which you spent so much time negotiating and could cost you major savings in the long run. Good management of your telecom contract implementation is imperative to ensure that you start reaping the benefits of your savings immediately. Whether transitioning to a new vendor or staying with your current vendor, you should have an experienced and knowledgeable project manager to oversee and create a transition plan and/or schedule. This will help to avoid multiple invoices and charges during the change over to the negotiated services in your contract. Making sure that all disconnects are performed immediately will also help to avoid being charged for services that were not negotiated in your contract. It is also important to make sure that you are not invoiced for services not yet delivered. Obtaining credits for these types of mistakes/errors can take a long period of time to get resolved if not handled immediately. Knowing how to Administrate your Contract We have come full circle and are at the point where the contract gets put in a file with AP or the Legal Department. As you do not want to lose control of the contract and the negotiated terms, you will need to make sure that a copy of the contract has been given to the Telecom Manager and/or Project Manager so that they may familiarize themselves with the rates and terms of the contract and have it on hand for any inquires that may arise. Continuous contract monitoring is an extremely important part of getting the most out of your telecom contract. This entails constant scrutiny and enforcement of rates, terms of the contract and implementation. If your terms are not met, you could be bombarded with erroneous charges that could be disastrous for your telecom spend budget. Most contracts have specific demands that you as the client must meet in order to keep the contract valid and avoid severe charges. These need to be monitored closely to ensure that you do not fall short of your terms and incur huge fines. Commitment levels is one of the largest demands that is negotiated in a contract. If you should fall short of these commitment levels, you could pay extensively for this. You should have a database for your own records that you can compare with vendor reports to make certain a miscalculation does not put you below your commitment level. Keeping on top of the current trends and rates is another aspect of administrating your contract. This will also help you when it is time to re-negotiate your contract. Knowing and managing your telecom contract will make it much easier to resolve any invoicing disputes that may occur and will help to ensure that you have received the proper credit when earned and that you have not been overcharged for specific services. When you find a credit due and a request is placed to receive the credit, you must make sure that you are requesting the credit under the terms of your contract, looking for special terms or language in your contract that is required for submission of a credit request, or your claim could be denied. Knowing how to Optimize your Contract Optimization of your telecom contract can be a very time consuming job; however, this could save you a huge amount of money in the end and is worth the time to keep track of improvements that could be made to the contract. One aspect of optimizing your telecom contract includes warranting that more cost effective services are being used in place of switched services. Many people do not realize when using dedicated T-1s and their long distance is PICed to their provider that they will be charged switched rates. Frame relay networks and anyone who may have more than ten T-1 circuits in place could also be hit with these charges. Any new services not provided in the contract, but added at a later date, should first be negotiated as an amendment to the original telecom contract to avoid being charged the higher rates. Another attribute that could help to optimize your current telecom contract would be to conduct Annual contract reviews and mid contract renegotiations, being careful not to increase commitment levels and extension of your contract lowering your current savings. The success of this aspect will depend on how well the other processes of your telecom contract management have been controlled. Better Position Your Business It is critical that your telecom contract complies with agreed-upon billing terms, and effectively covers all appropriate call categories. Routinely renegotiated telecom contracts can ensure you decrease your contract rates and improve your vendor terms and conditions, and that you are only paying for the services you actually receive at the appropriate contracted rate and terms, and you are getting the best rates available. Having the most up-to-date knowledge of the current trends and spends in the telecom market means that your business can be better positioned to modify existing agreements, obtain overpayment refunds, collect unfulfilled credits, make advantageous decisions regarding spend commitments, and enter into superior new agreements. Symphony Spend Management Solutions at a Glance § Founded in 2002 § Top-Notch Staff and Quality § Process Maturity Rated at CMMI Level 4 § Strong Financial Backers § Primary Financiers are TH Lee Putnam Ventures and Symphony Technology Group § Global Secure Infrastructure Acquisitions § 2002: Telco Research (originally founded in 1975) § 2003: Teletron (originally founded in 1989) § 2004: Stonehouse Technologies, Inc. (originally founded in 1978) Our Telecom Expense Management enables organizations to implement a closed-loop expense management process, resulting in greater control and cost reductions. No matter where an organization stands in implementing expense management best practices, Symphony SMS’ expertise, processes and technology can help achieve the next level of management and savings. From managing assets to analyzing service provider invoices, Symphony SMS delivers global insight into what transactions are made within an organization – and at what cost. Our Telecom Expense Management has over 300 clients spanning various industries, such as financial services, manufacturing, hospitality, retail, consumer products and pharmaceutical. Our clients include: § 4 of the top 5 commercial banks § 3 of the top 5 telecommunications providers § 3 of the top 5 aerospace and defense manufacturers § 3 of the top 5 motor vehicles and parts manufacturers § 3 of the top 5 pharmaceutical companies § 2 of the top 5 beverage companies § 2 of the top 5 forest and paper products companies § 2 of the top 5 diversified financials companies ContactDetails To talk about how your business can benefit by working with Symphony SMS, contact us at: Symphony Spend Management Solutions SMS-Sales@Symphonysms.com www.symphonysms.com

Healthcare Telecommunications Expense Management Outsourcing By outsourcing your telecommunications expense management, you can reduce associated administrative responsibility, improve the telecom infrastructure, and significantly reduce expenditures for telecommunications as a whole. Why Healthcare Organizations Need TEM Outsourcing Healthcare organizations are continuously searching for ways to save money while, at the same time, trying to improve their quality of patient care by utilizing state-of-the-art telecommunications technologies and services. Unfortunately, such organizations often have limited resources and funding for direct patient care areas, let alone telecommunications. The extra burden of daily administrative duties required to manage telecommunications expenses can further tax already limited resources. By outsourcing your telecommunications expense management (TEM), you can reduce associated administrative responsibility, improve the telecommunications infrastructure, and significantly reduce expenditures for telecommunications as a whole. There are a number of processes available to help ensure that a healthcare organization is maximizing its savings including: · Inventory Audit, Analysis and Managemen · Telecommunications Network Optimization and Capacity Management · Contract Evaluation and Management · Invoice Processing, Payment and Analysis · Tariff, Taxes and Surcharges Management Each of these processes is crucial to optimizing services and controlling expenditures of healthcare telecommunications. Inventory Audit, Analysis and Management Today’s healthcare enterprise is in constant change and evolution. Mergers and acquisitions, financial performance, patient volumes, and management change are a few of the reasons for a continuous focus on maximizing resources and assets. Each enterprise has many thousands of telephone lines, individual telephones and pagers, and hundreds more telecommunications circuits, trunks and the required supporting termination equipment. Unnecessary and inefficiently used inventory can result in significant and needless costs in terms of dollars, space and management. Developing an accurate inventory of the services and equipment used by your organization is a key component of an expense and resource management program. Within such an inventory, key pieces of information may be included as appropriate: · The identification number of the inventory item, · The description of the item, · To whom the inventory is assigned including VIP or other assignee status, · When the inventory was assigned/deployed, · Where the inventory is located and/or circuit termination information, · The vendor that supplied the inventory and applicable contract information, · The version or model number of the item, · How the inventory item is configured, · The non-recurring and recurring charges associated with the inventory, · The cost center from which funding is derived for the item, · The status: active/inactive, · Comments and special requirements, · Calibration information, and · Traffic/usage information. A detailed analysis of such information can, and often will, lead to the identification of unnecessary and/or unused inventory. It can point out inventory items assigned to staff no longer with the organization. More importantly, it will identify expensive inventory for which a more cost-effective solution is available. Once the inventory is identified and classified, it is imperative that a method for keeping it accurate be established. Changes in inventory usage and requirements occur on a daily basis. In a large medical facility, delayed inventory tracking could result in significant and unnecessary expenditures as well as a failure of important person-to-person communications between doctors and nurses. It could also lead to the omission of new expenditures required to meet the mission of the organization when needs exceed the ability to support the needs. Utilizing the information contained in a properly detailed and updated inventory will result in the ability to manage all aspects of the inventory on an ongoing basis. It will lead to successful implementation of the other aforementioned aspects of TEM: · Telecommunications Network Optimization and Capacity Management · Contract Evaluation and Management · Invoice Processing, Payment and Analysis · Tariff, Taxes and Surcharges Management Properly managing inventory is very time consuming, especially in a large organization. Properly managing inventory is, however, a cost containment necessity and will more than pay for itself. Large healthcare organizations usually do not have the staff and/or resources to oversee an inventory optimization project nor those required to track inventory on a daily basis. Healthcare organizations are in the business of healthcare – not telecommunications. Outsourcing telecommunications processes to a third party company with proven expertise and expense management tools can result in very positive results in terms of reduced costs, improved productivity, enhanced service provisioning, and greater accountability. Telecommunications Network Optimization and Capacity Management: Network optimization and capacity management are simple terms used for making sure the healthcare organization is optimally using in-place telecommunications inventory and is well positioned for anticipated growth and emergency telecommunications needs. Having knowledge of the most up-to-date technology, inventory, usage, trends and costs of telecommunications services will ensure that the equipment and services which best fit the needs of the organization are being utilized and/or updated on a regular basis. Expense optimization, as well as preparedness for the unknown, are the benefits of processing this information. Specific and daily understanding of usage patterns for circuits, facilities, pagers, cell phones and other telecommunications is required to support telecommunications network optimization and capacity management processes. Managing these processes requires hard data on: · Incoming telephone call volumes and distribution by time of day · Outgoing telephone call volumes and distribution by time of day · Telephone trunk (circuit) usage by time of day · Dedicated data, frame relay and ATM circuit usage by time of day · Cell phone usage by individuals and the organization as a whole · Pager usage · Anticipation of above usage during times of emergency (pandemic Flu, etc.) · Network inventory A local and focused telecommunications staff backed by off-site systems analysts, financial experts, specialized systems, and data acquisition systems that can acquire the above information will be of immense help to the healthcare organization. For example: · Determination of current over-capacity capabilities can lead to · elimination of unnecessary expenditures and a cost effective · telecommunications network optimization plan. This, in turn, may · lead to an integration of all telecommunications and data transport requirements – an effective sharing of network infrastructure costs between voice and data requirements. Knowledge of telecommunications technology trends and advances is of paramount importance in the network optimization, capacity management, and the equipment and systems acquisition processes. While telecommunications vendors often have generalized expertise in overall network optimization, they most often do not have access to the data required to optimize individual customer networks. Reputable TEM providers have expert staff members and specialized systems required to obtain usage data, view trend information, store the data, and process that data to the cost effective benefit of Healthcare Clients. Contract Evaluation and Management: Just as a provider must know more about its own needs than the customer when negotiating rates, the telecom folks must know more about their current assets and requirements, along with future needs, to focus the discussion. Specific market knowledge of similar transactions is also required to drive the best deal. Effectively gathering information for equipment and services requires up-to-date knowledge of today’s telecommunications industry trends and technologies and prevailing rates and costs. Entering into telecommunications contract negotiations without being fully knowledgeable of these factors could result in unnecessary initial and long term expenditures. Once inventory and network requirements are well understood, it is necessary to effectively negotiate cost-effective contracts with equipment and service providers. In addition, in-place contracts must be a part of this contract knowledge base. Negotiated and implemented telecommunications contracts often end up filed and forgotten. They are unrealized again until the contract comes up for renewal or even after it is too late and after an auto-renewal clause has taken effect. Finding a more cost-effective provider might be precluded by lack of auto-renewal clause knowledge. Bottom Line: An organization may experience substantial and unnecessary expenditures if telecommunications contracts are not managed and monitored on a regular and systematic basis. Continuous management of telecommunications contracts can help improve the costs of telecommunications services and help ensure that contract terms support cost effectiveness. Effective management of telecommunications contracts is imperative to ensure that the organization takes advantage of available savings benefits immediately. Whether transitioning to a new vendor or staying with a current vendor, an experienced and knowledgeable project manager will be required to create and oversee a transition plan and/or schedule the ongoing service level agreements (and possible penalties) within the contract. Most healthcare organizations do not have the time, resources, knowledge or experience to effectively handle all aspects of the contract management process. As a result, very costly savings oversights may very well occur. This is another area where having these services outsourced would be of benefit. Invoice Processing, Payment and Analysis: Most healthcare organizations receive hundreds of pages of communications charges from their vendors each month, and pay them without knowing for certain that they, in fact, own the equipment they are being charged for, that the charges are at their contracted rate, that billing start and end dates are correct. If a review or verification process does exist, it most likely is decentralized and non-standard. While most organizations have good intentions, the sheer volume of invoices makes verification a true nightmare, and puts undue strain on personnel resources. Receiving and processing numerous service provider invoices can be a burden for any organization. A proven outsourcer can manage this process for your organization – from receipt though payment. They will receive all your invoices, both electronic and paper, and normalize the data into a common repository. From this invoice repository, you can automatically or manually authorize payment and gain visibility to service costs and savings opportunities. All financial data is then integrated back to your financial systems to ensure records are accurate and up-to-date. Keeping up with the volume of invoices is tough enough. It is even tougher to perform detailed scrutiny of these invoices for billing errors. Without question, healthcare providers suffer errors in their invoices that go unnoticed by both the vendor and the customer. All errors – whether they be in favor of the customer or the vendor – should be corrected. However, if certain errors are first found by the service provider, critical telephones, pagers and/or circuits could be disconnected without notice – this would be unacceptable by all affected parties in the healthcare community. Again, a qualified TEM provider can receive your invoices and then automatically check them against a number of key areas, such as inventory, MACD activity, previous invoice activity, contract rates and terms, and recurring charges. Identified invoice exceptions are reported and followed through to completion by their staff, in order to ensure timely and accurate credits. Tariff, Taxes and Surcharges Management: Healthcare providers may be organized as not-for-profit institutions, or as for-profit corporations. If invoices are not audited on a regular basis, telecommunications vendors may erroneously charge taxes to a not-for-profit entity, resulting in a loss of essential revenue. Additionally, there are numerous Federal and State programs that apply to healthcare that allow cost relief or recovery in the telecommunications area. Some programs are ongoing while others are created on a one-time basis around a critical issue or event that directly impacts providers of health services. Each program has rules and regulations for qualification and reimbursement of certain telecommunications expenses. Healthcare organizations may or may not become aware of all the programs available to them and, in most cases, do not have the expertise or time to research, apply and track eligibility. There are some TEM companies that will provide this type of service for healthcare providers. The cost of such services is often negated by the savings realized. Symphony Spend Management Solutions at a Glance § Founded in 2002 § Top-Notch Staff and Quality § Process Maturity Rated at CMMI Level 4 § Strong Financial Backers § Primary Financiers are TH Lee Putnam Ventures and Symphony Technology Group § Global Secure Infrastructure Acquisitions § 2002: Telco Research (originally founded in 1975) § 2003: Teletron (originally founded in 1989) § 2004: Stonehouse Technologies, Inc. (originally founded in 1978) Our Telecom Expense Management enables organizations to implement a closed-loop expense management procGlobal Secure Infrastructure ess, resulting in greater control and cost reductions. No matter where an organization stands in implementing expense management best practices, Symphony SMS’ expertise, processes and technology can help achieve the next level of management and savings. From managing assets to analyzing service provider invoices, Symphony SMS delivers global insight into what transactions are made within an organization – and at what cost. Our Telecom Expense Management has over 300 clients spanning various industries, such as financial services, manufacturing, hospitality, retail, consumer products and pharmaceutical. Contact Details To talk about how your business can benefit by working with Symphony SMS, contact us at: Symphony Spend Management Solutions SMS-Sales@Symphonysms.com www.symphonysms.com

Government Compliance With OMB Circular A-87 Telecommunications Cost Allocation Although A-87 is mandated for state governments, this method of cost allocation is an excellent guide for ALL Telecom departments to use to establish rates for proper charge back allocation of telecommunications expenses. Internal Service Funds Federal, state and local government organizations that provide goods and services to other government entities on a full cost-reimbursement basis are known as Internal Service Funds (ISF). By definition, an ISF should operate on a non-profit basis. In other words, the total revenue generated by the ISF should equal the total cost incurred by the ISF. In accordance with federal regulations, these organizations should develop Cost Allocation Plans. These plans should be utilized by the organization to allocate cost on a monthly basis, and should become the basis for the establishment and maintenance of rates for products and services delivered to their customers. The main objectives of the regulations are to ensure that ISFs are not operating as profit centers for governments, and that the revenue generated by a specific service does not exceed the actual cost of providing that service. Summary of A-87 Reporting Federal, state and local governments are tasked with capturing telecommunications revenue and cost data at the line-of-service level for use in the Cost Allocation Application. As Internal Service Funds, State and local government telecommunications organizations (Customers) must adhere to guidelines established by the federal government and published in the Federal Office of Management and Budget (OMB) Circular A-87 (Cost Principles for State, Local and Indian Tribal Governments). Among other things, OMB A-87 establishes reporting requirements for Statewide Cost Allocation Plans, Agency Cost Allocation Plans, and Internal Service Funds. Most government Information Technology (IT) organizations that provide either telecommunications and/or computing services are classified as ISFs and must adhere to OMB A-87 requirements. The Cost Allocation process must allow for the capture of revenue and cost data needed in order to produce monthly profit/loss reports by line-of-service in order to comply with the OMB A-87 reporting requirements. Although this is mandated for government organizations, this method of cost allocation is an excellent guide for ALL Telecom departments to use to establish rates for proper charge back allocation of Telecom expenses. The Customer generates financial statements on a monthly basis. One of the reports produced is a Statement of Operations. The Statement of Operations provides a summary of the Customer’s revenues and expenses for the month at the fund (entity) level and shows whether the entity made a profit or loss for the month. The goal of the Cost Allocation process is to allocate all revenues and expenses of the entity to specific lines-of-service provided by the entity and to produce a Statement of Operations (profit/loss report) for each line-of-service provided by the entity. Requirements There are eight main required functions: · Classify revenue produced by the entity to lines of services and identify any non-line-of-service revenue produced by the entity. · Classify direct telecommunications costs of the entity to lines of services provided by the entity. · Capture all personal services cost of the entity (direct and indirect). · Capture and classify all depreciation costs of the entity (direct and indirect) to lines of services. · Capture all other costs of the entity (indirect). · Obtain actual monthly cost data from the Statement of Operations. · Allocate all administrative (indirect) cost of the entity to lines of services. · Create a report of revenues and expenses (Statement of Operations) for each line-of-service provided by the entity. Classifying the Revenue of the Entity The easiest way to obtain the line-of-service revenue is from the bills produced by a TEM (telecommunications expense management) application’s cost allocation or chargeback processes. Each charge must identify the specific line-of-service. This data is used as input to a monthly “Cost Allocation Report”. There may be some revenue generated by the entity and reported on the Statement of Operations that is not line-of-service related (i.e., interest income). These non-line-of-service revenues must be taken into account by the entity during the monthly reconciliation process. Classifying the Direct Telecommunications Cost of the Entity The classification of line-of-service direct telecommunications cost is determined from the Vendor Invoices detail data. Just as in the classification of the revenue, all Invoice charges must be identified by specific line-of-service. A TEM invoice system is used to capture the direct telecommunications cost by line-of-service. These costs are accumulated in line-of-service cost pools, and maintained for input to the monthly “Cost Allocation Report”. The total direct telecommunications costs should be equal to the total amount of direct telecommunications cost reported on the entity Statement of Operations. Capturing the Personal Services Cost of the Entity The personal services cost of the entity may be either directly related to a line-of-service or indirectly related to a line-of-service (indirect/administrative). In order to determine the classification of personal services cost, inclusive of salaries and related benefits, the “Personal Services” must be determined. Personal information includes: · Employee Name · Employee SS# · Employee Title/Classification · Employee Bi-Weekly Salary · Employee Type: Fixed or Variable · A distribution of employee time by allocation code (line-of-service) such as: 10% Administrative 50% Local Service 40% Cellular Service Calculation of Personnel Costs The data for the “Fixed” employees is multiplied by the number of bi-weekly pay periods in the month and combined with the data for the “Variable” employees. This data is then accumulated and summarized for all employees using a weighted average methodology and used to allocate actual “Personal Services” monthly cost to line-of-service and administrative cost pools. Sample calculations would be as follows: Worker 1(Fixed) Salary $4,000 per pay period Administrative 10% $400 Local Service 50% $2,000 Cellular Service 40% $1,600 Worker 2 (Variable) Salary $1,500 per pay period Administrative 20% $300 Local Service 30% $450 Cellular Service 25% $375 Pager Service 25% $375 Weighted Summary Average Administrative $1,000 14% Local Service $2,900 41% Cellular Service $2,350 34% Pager Service $ 750 11% Totals $7,000 100% Calculation of Depreciation Costs The depreciation cost of the entity may be either directly related to a line-of-service, or not directly related to a line-of-service (indirect/administrative). The goal is to identify depreciation costs in a similar manner as Personnel costs. Calculations of depreciation cost are based on the straight-line depreciation method. Depreciation must be assigned by line of business and administrative cost pools. For example, the depreciation calculation for a “PBX” would be as follows: Asset Original Cost = $458,000 Asset Useful Life = 120 months Asset Monthly Depreciation Cost = ($458,000 / 120) = $3,816.67 Line-of-Service 1: Monthly Depreciation Cost = ($3,816.67 X .7) = $2,671.67 Line-of-Service 2: Monthly Depreciation Cost = ($3,816.67 X .3) = $1,145.00 Capturing Other Costs of the Entity All other costs of the entity should be considered to be indirect (administrative) cost. This category would include but not be limited to such things as travel, office supplies, rent and printing cost. All such administrative costs shall be totaled and included in the administrative cost pool. Costs related to Operating Services, Office Supplies, Travel, Professional Services, and Interagency Transfer cost would be accumulated and maintained in the administrative cost pool. Obtaining Actual Monthly Data from the Statement of Operations At this point, the revenue and cost data have been identified, classified and accumulated at various levels. Following is a recap of those steps: · Revenue data was identified and accumulated in final line-of-service cost pool. · Telecommunications cost were identified and accumulated in final line-of-service cost pool. · Depreciation cost were identified and accumulated in final line-of-service and administrative cost pool. · The distribution of Personal Services cost was identified and accumulated by either line-of-service or administrative cost pool. All costs reside in either final line-of-service cost pools or in the administrative cost pool. The next step in the process is to allocate the cost in the administrative cost pool to the line-of-service cost pools based on criteria defined by the customer. The customer will define the criteria by completing an “Allocation Criteria” process. Then all Revenue, Direct Cost and Personal Services Cost data is available for creating the an Allocation Matrix by line of business. Report of Revenues and Expense by Line-of-Service The final step in the Cost Allocation process is to produce a monthly report of revenues and expenses by line-of-service. This “Cost Allocation Report” shall be formatted as follows: Line-of-Service Revenue Direct Cost Gross Profit Admin Cost Net Profit Local Service 985,000 800,000 185,000 155,000 30,000 Long Distance 450,000 375,000 75,000 68,000 7,000 800 Service 750,000 650,000 100,000 35,000 65,000 Circuits 700,000 585,000 115,000 112,000 3,000 To summarize, the report data is obtained from the following sources: Revenue - the monthly revenue by line-of-service data is obtained from the Customer Chargeback reports. Direct Cost – the direct (telecommunications) cost by line-of-service data is obtained from the Vendor Invoice data. Gross Profit/(Loss) – gross profit is Revenue minus Direct Cost. Administrative Cost – administrative (indirect cost) cost data is obtained from three sources as follows: • From allocation of Personal Services cost • From allocation of Depreciation cost • From allocating the cost in the Administrative Cost Pool Net Profit/(Loss) – net profit or loss is Gross Profit/(Loss) minus Administrative Cost. Make Sure You Comply with OMB A-87 In summary, federal, state and local government IT organizations that provide products and services to other government entities on a cost recovery basis are know as Internal Service Funds and are required to adhere to cost allocation guidelines established by the federal government and published in OMB Circular A-87. The circular establishes guidelines that govern what costs are allowable and how they should be allocated to the services provided by the ISF. Subsidies and overcharges for services provided could result in significant penalties assessed by the federal government. ISF executives and managers should be cognizant of the OMB Circular A-87 guidelines and should ensure that they are incorporated into the operations of their organizations. The keys to OMB A-87 compliance are two fold. First, the organization must develop a sound Cost Allocation Plan that will pass the test of an A-87 compliance audit, and second, the organization must have the capability of capturing and reporting both revenue and cost data at the rate element (Line-of-Service) level. The time to review your organization’s ability to pass an A-87 review is now, before problems arise. Symphony Spend Management Solutions at a Glance § Founded in 2002 § Top-Notch Staff and Quality § Process Maturity Rated at CMMI Level 4 § Strong Financial Backers § Primary Financiers are TH Lee Putnam Ventures and Symphony Technology Group § Global Secure Infrastructure Acquisitions § 2002: Telco Research (originally founded in 1975) § 2003: Teletron (originally founded in 1989) § 2004: Stonehouse Technologies, Inc. (originally founded in 1978) Our Telecom Expense Management enables organizations to implement a closed-loop expense management process, resulting in greater control and cost reductions. No matter where an organization stands in implementing expense management best practices, Symphony SMS’ expertise, processes and technology can help achieve the next level of management and savings. From managing assets to analyzing service provider invoices, Symphony SMS delivers global insight into what transactions are made within an organization – and at what cost. Our Telecom Expense Management has over 300 clients spanning various industries, such as financial services, manufacturing, hospitality, retail, consumer products and pharmaceutical. Contact Details To talk about how your business can benefit by working with Symphony SMS, contact us at: Symphony Spend Management Solutions SMS-Sales@Symphonysms.com www.symphonysms.com

Management Of Telecommunications Expenses Pressed for time and resources, telecom providers are increasingly pushing the responsibility of billing management back to their enterprise customer -- you. Benefits of Using a TEM System Many telecom departments, especially those for financial institutions and government organizations that are particularly challenged with managing their telecom spend, have purchased a telecommunications expense management (TEM) system to help administer their communications services. The primary goals of a telecom manager is to control expenses, provide adequate services to their customers, pay accurate amounts to vendors for the services they provide, equitably allocate all telecom expenses to their customers for the services that they use, and to provide accurate data for reporting trends and budgeting purposes . Organizations today devote more and more resources to managing their communications functions, as there is pressure to reduce costs and manage this operation more efficiently. Telecom costs are generally a company’s third or fourth largest expense, costing $3,000 to $5,000 annually per employee, according to an Aberdeen Group Survey of more than 150 firms. Without a TEM system the telecom department faces an impossible task. To properly manage all aspects of the telecom environment, the telecom manager must have information, which is best maintained and reported in a TEM system. Necessary information includes: · An accurate Inventory of all assets and services with provisions to keep it updated, · An Order and Ticket System to record and manage all calls to the help desk, · SLA tracking and reporting on all Requests and Tickets, · Contract rates for vendor invoiced services, · Vendor Invoices online in a standard format, · Reconciliation and Dispute management of vendor billing issues, · Cost Allocation of telecom expenses to end users. Each of these processes is crucial to effectively manage Telecommunication Services. A good TEM system can make it easier to curb costs, monitor performance of vendors as well as the network, and support long-range budgeting and asset management. It will allow you to analyze trends and identify and eliminate any fraud or abuse. It will eliminate costly manual processes and streamline operating procedures. A TEM solution incorporates both software and services to help enterprises effectively manage voice and data expenses, assets and processes. To provide the maximum benefits, the solution should be fully integrated, providing a broad range of functionality from order management, services and asset tracking, and call accounting to invoice management and cost recovery through chargeback. Business data on all services and assets, invoices, and orders should be consolidated into one central repository so information can be shared and reconciled across all applications. Integrated Functionality In the best of all worlds, a comprehensive communication services management system facilitates a structured methodology to manage the entire telecommunications operational workflow, from planning through financial management, using automation where possible and practical. Functions covered in this automated process include: · Analysis and planning for traffic studies, and plan optimization. · Order management for processing service requests using a standard product and/or service catalog. · Provisioning, complete with request delivery and task flow management. · Operations management for processing Moves, Adds, Changes and Deletes (MACDs), tracking inventory of assets and services, identifying fraud and abuse. · Customer Care facility for trouble ticket management, Help Desk support, statistical reporting. · Invoice management to manage vendors, process electronic and paper invoices, reconcile invoices against inventory and contract rates and terms, allow electronic approval, and provide an automated feed to an AP system. · Cost allocation to consolidate charges from various vendors, distribute those costs to appropriate end-users, and provide a secure bill via the web. · Financial management which integrates telecommunications expense and billing data with financial systems for accounts payable, accounts receivable, general ledger. · Comprehensive reporting capability to include online inquiry and printed reports. Achieving the complete benefit of TEM requires a disciplined and systematic approach, incorporating the entire communications workflow throughout the process. And it may require a change from “business as usual” procedures. Establishing an integrated business process based on function is key to using TEM to its best advantage. A good communications management system simplifies control and management of communications resources through automation and improved efficiencies. System security can effectively control access to information according to user-defined parameters such as cost center or location. By allocating charges to various cost centers and measuring actual cost vs. budgeted costs, the system can promote cost awareness among managers and departments. Managers can now stay on top of costs through asset reporting. Statistics on personnel and vendor activities produced by the system make it possible to accurately track performance for SLA requirements. TEM solutions should provide comprehensive reports, covering system usage, outages, problems, resolution, budgeted costs, actual costs and other relevant data, making it easier for company executives to make long term plans. These long term plans pertaining to the company’s total communications needs can now be more accurately forecasted. Having the most current and accurate information is imperative to forecasting correctly for any organization, especially in the telecommunications area. Flexibility is Key While flexibility is key in aligning your business practices to your TEM solution, your TEM solution must also be flexible enough to tailor sophisticated technology to your particular needs without relying on custom code. User-defined field names, drop-down menus, Web-enabled access to the data, downloads to other applications, feeds to and from legacy systems, easily customizable reports: all should be available in your TEM. In addition, your TEM solution should be available in different business models – in-house software, a fully integrated ASP solution, comprised of full remote access to the EMS application, as well as a fully managed solution by telecom professionals, or a combination thereof. In this way, you can have the right solution your way. The End Justifies the Means As complex as today’s communications services have become, it is simply impossible for the functions of a communications services management system to be performed manually or by point solutions for an organization of any size. By cutting costs, managing assets, and improving staff productivity of both communications support staff and other organization employees, such a system will easily justify its existence. With a proven communications services management system in place, enterprises can now focus their energy and efforts on running their businesses rather than worrying about how to effectively manage the communications functions. Symphony Spend Management Solutions at a Glance § Founded in 2002 § Top-Notch Staff and Quality § Process Maturity Rated at CMMI Level 4 § Strong Financial Backers § Primary Financiers are TH Lee Putnam Ventures and Symphony Technology Group § Global Secure Infrastructure Acquisitions § 2002: Telco Research (originally founded in 1975) § 2003: Teletron (originally founded in 1989) § 2004: Stonehouse Technologies, Inc. (originally founded in 1978) Our Telecom Expense Management enables organizations to implement a closed-loop expense management process, resulting in greater control and cost reductions. No matter where an organization stands in implementing expense management best practices, Symphony SMS’ expertise, processes and technology can help achieve the next level of management and savings. From managing assets to analyzing service provider invoices, Symphony SMS delivers global insight into what transactions are made within an organization – and at what cost. Our Telecom Expense Management has over 300 clients spanning various industries, such as financial services, manufacturing, hospitality, retail, consumer products and pharmaceutical. Contact Details To talk about how your business can benefit by working with Symphony SMS, contact us at: Symphony Spend Management Solutions SMS-Sales@Symphonysms.com www.symphonysms.com

Wireless Telecommunications Expense Management Outsourcing A growing dependence on wireless services greatly increases telecommunications expense and places a heavier administrative burden on those who are tasked with managing these services. Why Outsource Wireless Telecom Expense Management? Today’s fast-paced businesses rely more than ever on wireless devices to stay connected in a global marketplace. This growing dependence on wireless services greatly increases telecommunications expense and places a heavier administrative burden on those who are tasked with managing these services. This burden is exacerbated by the fact that mobile technology, equipment and services are continually changing, thus requiring upgrades as well as rate plan and other contractual modifications. On the carrier side, consolidation in the industry creates additional confusion and complexity for the consumer. Specific challenges encountered in managing this area include the need to use multiple vendors for coverage in specific geographies, divergence of contract terms, rate programs, protocols and internal policies. All of these issues comprise a very challenging and risky environment. If all of these aspects are not managed and audited on a regular basis, the risk of over spending on wireless telecommunications can be enormous. In response to these risks many organizations are turning to outsourcing in order to gain control over the ever-rising costs of wireless telecom expenses. At the same time, these organization expect a better return on investment by having skilled professionals auditing and optimizing their services. Studies show that continuous monitoring and auditing of vendor invoices against actual equipment and services in use can actually save 10 percent or more on your telecom spend. Wireless Contract Optimization Some of the key areas for optimizing a wireless contract are: § Discounts on service options, § Equipment and accessories, § Pooled minutes, § Commitment levels, § Term plan and length of plan for each individual, § Number portability clauses, § Early termination clauses, and § Dispute resolution clauses. Complete and accurate information is essential to putting you in the best position when negotiating a wireless contract. Some of the more important pieces of information needed include your current usage, number of users, location of users, types of devices employed, and travel patterns of users. In addition to current usage information, you will need to forecast new usage and/or changes that may occur during the contract term. If new services are added to a current contract and the provisions have not been made for new services to be added under the current terms, you could be charged standard rates. These totals would most likely not be included in your commitment levels, which could cause a contract shortfall resulting in penalties or reductions in discounts. Do not rely on the vendor to supply this information as they may give you misleading numbers that could potentially cost you more in the long run. The wireless vendors are in the market to negotiate the contract to their advantage and will not take the time to properly analyze your needs. Also, ensuring number portability when optimizing your wireless contract could be a key factor in the event that your company should elect to change vendors for a better contract at a later date. WirelessRate Optimization & Cost Auditing Many organizations allow employees to choose their own service plan and equipment and then reimburse the individual user for the costs. This could result in the company paying the highest rates offered with limited means of controlling the costs. Once an account is locked into an individual contract, the rates may not be changed until the contract expires. Managing your wireless telecommunications invoices on a monthly basis, for each plan and for each piece of equipment, will allow you to track overages and isolate roaming charges, including international roaming. This information will then allow you to adjust the plan to avoid being charged higher rates on the overage of minutes. In addition, monthly wireless expense management will allow you to identity services or devices that are not being used and are not needed, thus allowing you to disconnect an account or change the features of a given account. Another aspect of wireless rate optimization would be to have corporate accounts with your wireless telecommunications vendor in which your business will be eligible for volume discounts. Depending on the nature of your organization there may be preferred rates offered through affiliation with various trade organizations, government agencies, and or purchasing consortia. Information concerning involvement in such organizations should be gathered during the initial negotiation preparation process. Outsourcing the management of your wireless services allows you to concentrate on your core business. Qualified TEM providers can provide expertise in the audit area to include checking that your carrier is applying the correct plan fee, overage rate and data usage costs, as well as ensuring you are paying only for the services you are using. Furthermore, they can identify opportunities for upgrades in technology and/or devices to enhance, consolidate, and benefit the bottom line; assist in identifying misuse; and can provide a best practices guideline or policy details for corporate use. In most cases, these savings can be achieved transparently through coordination with the vendor with no disruption and little effort on your part. Symphony Spend Management Solutions at a Glance § Founded in 2002 § Top-Notch Staff and Quality § Process Maturity Rated at CMMI Level 4 § Strong Financial Backers § Primary Financiers are TH Lee Putnam Ventures and Symphony Technology Group § Global Secure Infrastructure Acquisitions § 2002: Telco Research (originally founded in 1975) § 2003: Teletron (originally founded in 1989) § 2004: Stonehouse Technologies, Inc. (originally founded in 1978) Our Telecom Expense Management enables organizations to implement a closed-loop expense management process, resulting in greater control and cost reductions. No matter where an organization stands in implementing expense management best practices, Symphony SMS’ expertise, processes and technology can help achieve the next level of management and savings. From managing assets to analyzing service provider invoices, Symphony SMS delivers global insight into what transactions are made within an organization – and at what cost. Our Telecom Expense Management has over 300 clients spanning various industries, such as financial services, manufacturing, hospitality, retail, consumer products and pharmaceutical. Contact Details To talk about how your business can benefit by working with Symphony SMS, contact us at: Symphony Spend Management Solutions SMS-Sales@symphonysms.com www.symphonysms.com