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News: Teligistics In The News
Tackling `teleconfusion'Teligistics aims to ring up customer savings by dialing into billingsWalker C. Wooding Jr Houston Business JournalDave Roberts likes to think of himself as sheriff of phone systems. Indeed, after working several years for a telecom giant and gawking at the huge amounts of money companies were spending on telecom bills, Roberts switched hats to establish Teligistics.com Inc. in 1998 to operate as the telecom bill police. "It was amazing to me to see how many accounts had no idea about how much they were paying," says Roberts, CEO of Teligistics.com. "That was the defining moment for me." One customer may ring up billings of up to $1 million a month while another may have its bills printed out in 50-to-60-pound heaps to be trucked into the office for inspection. The catch is unless a company's telecom staff is trained to decode the billings, it could do very little to develop a plan for savings. Roberts says Teligistics.com is saving clients an average of about 40 percent on telecom expenses. Last month, the company earned $10 million in billings from its clients -- the best month ever, says Roberts. "We're able to stop the bleeding now," Roberts says. "There's such a need for it." Telegistics.com was established with $4,000 in capital. The company generated enough cash flow in its first year to keep the doors open while Roberts took no salary to keep expenses low. Things started to look up when the company secured a couple of one-year contracts, and the idea appeared as if it would fly. But when the search for financing commenced, the company was turned down by several venture capital firms. Roberts stayed the course, and the company eventually landed a VC attorney to write its first private offering of $5 million in December. The offering is set to close around Oct. 15. JAMMING CRAMMINGSince deregulation created new competition in the telecom industry, the other side of the equation has brought on mass confusion for telecom buyers, say officers of Teligistics.com. The company calls the phenomena "tele-confusion." Because there are no existing standards for tariffs, billing platforms, rates and discounts, customers are left to rely on information from telecom salespeople. Teligistics.com says 95 percent of the client companies it has interviewed have no idea exactly what they should be paying for telephone lines, long distance and other telecom-related services. The company recently studied data accumulated by auditing of millions of dollars of its clients' telecom vendor billing. "We are continually amazed at the amount and frequency of unauthorized charges, hidden fees, inaccurate calculations and general incompetence," says Roberts. "The carrier billing is so complicated and difficult to read and analyze that it creates a natural environment for cramming to flourish." When bills are 100 pages long, simple math errors are easy to overlook when trying to add every single call detail record on a telecom bill. "These errors were consistent with this particular carrier, which may point to a glitch in their billing software," says Roberts. "And this carrier probably has millions of customers on the same billing." "With the downward pressure on long distance rates, it appears the long-distance carriers are trying to make up the difference by cramming the bills with additional charges in areas not so obvious to the business telecom user," says Roberts. The company wants to gain access to "switch-detail" records created when a call is transported through a carrier's switch. This information is used to create the billing data, and Roberts believes variance can be as much as 15 to 20 percent higher on the billing than the actual records show from the carriers switch. This type of cramming is difficult to prove because carriers do not like to cooperate by furnishing their switch records to compare with the billing records, says Roberts. ANALYZE THISThe company began a new service in July called Bill Checker through which the carrier automatically sends the client billing to Teligistics.com for auditing and processing. The new service further stamps Teligisitics.com as an outsourced telecom staff for its clients. The company has accounts that it processes as small as $1,000 billing all the way to Fortune 500 accounts spending millions. Also in July, Teligisitics entered into a strategic marketing agreement with i-TeleCo.com Inc., a subsidiary of New York City-based i-incubator.com Inc., a technology market segment identifier. The deal calls for Telegistics.com to work with i-TeleCo to structure rate tariffs and service platforms to take advantage of certain rate structure and service deficiencies the company has identified through hundreds of telecom audits. Teligistics.com. has developed a proprietary online software application named The Analyzer which effectively creates a fingerprint of client companies' telecom expenses totally unique to that client. This information is then "analyzed" by the software from a large database of rates, tariffs and promotions to determine what the best rate plan is for that particular client. The company has moved swiftly to protect all of its intellectual properties through the U.S. Patent and Trademark Office. The company's marketing approach is to offer this auditing service of their client companies' telecom bills for free. "Our extensive market research indicates that our clients do not trust traditional recovery or consulting companies operating on a contingency basis," says Roberts. "Given the choice, our clients prefer a no-cost approach. Since our clients are more comfortable with this method, we have completed resell agreements with leading providers to accomplish that goal and bring customers to our partners." Business arrives at Teligistics.com's door by way of referrals, its independent consultants and from its Web site. Teligistics hired Dan Sudduth in June as chief financial officer to help Roberts steer the company toward continued growth. Sudduth, who joined Teligistics.com from Sugar Land-based Henley Healthcare, has public market experience and a track record of successful initial public offerings, says Roberts, who is targeting an IPO or a reverse merger to place the company to the public markets. Roberts is expecting the company to turn its first profit in the fourth quarter. Plans are also in the works for nationwide expansion initially targeting New York, Los Angeles, Dallas, Chicago and Miami. The locations will serve as licensed independent sales offices for Teligistics. Roberts is also projecting his staff to increase from 16 to 40 by the end of the next quarter. "Our company is a different niche," says Roberts. "There is not another animal like it." Walker C. Wooding Jr., Houston Business Journal small business reporter, can be reached by e-mail at wwooding@bizjournals.com. |
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