Not only can executives no longer get comparative pricing information but in some cases carriers have actually inserted legalese into the contracts to block CIOs from comparing their telecomms rates with other CIOs and then bringing those rates to the carriers' attention during negotiations, according to Yates. CIOs should be alert to such clauses because talking to your colleagues is one of the best means of obtaining comparative pricing data.

CIOs may believe that the more services you purchase from one vendor, the lower the rate it will quote you. But experts say that is not so. Telwares' data shows that small companies receive just as many lower-priced deals as the big boys do. Therefore, going with one carrier isn't always the best solution for large enterprises.

Carriers say that they're not out to deceive their customers. "It's possible that I could trick a customer [during contract negotiations]," says John Irwin, vice president and general manager of BellSouth Business, but he says he knows he'll lose such customers when they figure it out. There's very little loyalty in telecomms to begin with. As for the negotiations, Irwin says his customers rarely pay the "sticker price". CIOs might not always hit their ideal, Irwin says, "but they're going to be in spittin' distance".

However, Irwin does acknowledge the difficulty of the CIO's negotiation position. "Probably there's no foolproof way to make sure that [CIOs] are getting the best deal possible," he says.

How to Avoid the Billing Quagmire

Because they deal with so many carriers for networked IT services, companies big and small are awash in telecomms bills. According to Aberdeen Group, the average mid-market enterprise processes more than 3000 telecomms-related bills per year; for the average Fortune 500 company, it's 15,000. The cost of just processing these bills (with no auditing for errors) is $US12.50 to $US21 per invoice. Conservatively, this equates to an average of $US188,000 in processing costs for big companies and $US38,000 at midsize companies - and that's just to keep on top of the volume.

Now think about this: Gartner estimates that up to 14 percent of telecomms charges are in error. Finding those errors (think needle in a haystack) and getting the carriers to reimburse your account is arduous. Gartner also says 20 percent of the problem is finding the error; 80 percent is getting the carrier to pay up. Carriers are even imposing a statute of limitations on their customers seeking compensation for billing errors. Basically, if you can't find the billing error (say a telecomms service was ordered but wasn't installed correctly) within a certain time frame - say, three months - you can't get that money back from some carriers.

In order to process an invoice, telecomms analysts need to look over each bill (some on paper, some on CD-ROM) and audit it against terms of the contracts as well as against tariff and service guidelines, tax charges and physical telecomms inventories such as the number of circuits. Every month. A VP of telecomms procurement at a global financial services company says her division alone receives 7000 to 8000 bills per month.

"And we are one of many divisions," says the woman, who asked not to be identified. Her company has outsourced, insourced and outsourced again the billing and expense management. Her group would need about 20 or so full-time staffers to scrutinize and pay telecomms bills in-house, she estimates.

According to TEM vendor Control Point Solutions, simple billing errors can take 60 to 120 days to resolve with carriers. Examples: A special contract price is not applied to a service; circuits or phone lines are taken out of service but never removed from billing; and a company is double-taxed on multistate services.

Complex billing errors can take much longer to resolve. For example, say one company acquires another. The acquiring company must notify the telecomms provider and request that the acquired company have all its billing tied to the master service agreement of the acquirer in order to get the same discounts and pricing. It can take up to a year to ensure that all billing and documentation is correct and that the carrier doesn't slap the acquiree with early cancellation and other commitment penalties, according to Control Point.

For a public company, there are key cut-off dates when accounting needs to report finances for the quarterly statements. If there are outstanding expenses that suppliers haven't sent the company, accounting folks must estimate that amount. Processing telecomms invoices (which come at varying times during the month) along with billing disputes and outstanding credits are huge problems because those can produce significant revenue swings. And CIOs bear the brunt of the finance department's frustrations.

"I'm getting the tar beaten out of me" by the finance staff, says the global network manager at the worldwide manufacturer of retail goods. "Finance says: 'Dammit, why can't you do it month-to-month properly? It's $200,000 one month; the next month it's $100,000.'"