7 Proven Strategies for Cost-Effective Network Management

Are your network costs constantly climbing while your IT budget stays flat?

Most IT leaders can spot inefficiencies like:

• Unused bandwidth

• Redundant services

• Forgotten contracts

The real challenge isn't spotting these problems - it's carving out time to fix them.

When you try to cut costs, you face vendor resistance, confusing contract language, and paperwork overload. Meanwhile, forgotten contracts quietly renew, and you keep paying for circuits you barely use. This pattern wastes thousands of dollars monthly. 

However, there are ways you can break this cycle. Here are seven specific strategies that reduce network expenses while actually improving performance.

1. Prioritize Type 1 Rather Than Type 2 / Resold Connectivity

When procuring internet connectivity, prioritize Type 1 connections for cost control and reliability.

Type 1 connections are delivered directly by the provider who owns the infrastructure. Type 2 connections involve a carrier buying local loop access from another provider.

Type 2 connections, while they offer vendor convenience, put your business at a disadvantage for several reasons:

• Higher costs: You pay a markup so the primary carrier can profit from the infrastructure they're leasing

• Longer implementation timelines: With two carriers involved, more issues are likely to arise, which can delay implementation

• Communication challenges: When issues arise, you play telephone between providers

• Compromised network diversity: You might think you have carrier diversity. But if multiple connections use the same underlying infrastructure, you have a single point of failure.

Resold connectivity, similar to Type 2 access, involves the direct resale of another ISP’s network to an end customer and comes with similar drawbacks..

While this may seem convenient, it creates multiple layers of markup, each provider adding their profit margin to the service. These aggregated solutions can cost 30-50% more than buying directly from Type 1 providers, with even longer deployment and troubleshooting timelines that can negatively impact network availability.

2. Maintain Adequate Diversity and Redundancy on ISP Circuits and Key Systems

Network downtime is costly for businesses, affecting revenue, productivity, and customer satisfaction. A well-planned approach to redundancy and diversity offers insurance against these potential losses.

Redundancy ensures you have backup systems ready to take over when primary systems fail. While N+1 redundancy maintains one backup for each critical system, it isn't always enough.

For mission-critical applications that directly impact revenue, consider N+2 redundancy to protect against multiple simultaneous failures. This includes redundant internet circuits, backup power systems (UPS and generators), and duplicate network hardware configured for automatic failover.

Network diversity prevents total outages by eliminating single failure points across multiple dimensions: 

• Carrier diversity: Contract with different providers like Spectrum and AT&T so one carrier's outage won't shut you down. 

• Physical path diversity: Ensure connections enter your building through different entry points. Let's say you have two fiber lines - if construction cuts one cable, the other path remains intact. 

• Technology diversity: Use different connection types, such as fiber for your primary and fixed wireless for backup. 

• Geographic diversity: Spread services across multiple locations rather than centralizing everything in one facility.

When planning your redundancy strategy, prioritize systems based on business impact. Calculate the hourly cost of downtime for each application, and then invest accordingly. This targeted approach protects what matters most without overspending on low-impact systems.

3. Right-Size Every Circuit and Use Burstable Bandwidth Where Viable

Many organizations overprovision bandwidth, purchasing far more capacity for their network infrastructure than they typically need. This approach leads to significant waste, as companies pay premium rates for bandwidth that sits idle most of the time.

Burstable bandwidth offers a more cost-effective alternative. Instead of purchasing fixed bandwidth, burstable billing allows you to pay for a baseline commitment while maintaining the ability to exceed that threshold during peak times. It's ideal for handling unpredictable network traffic spikes while maintaining optimal network performance.

Your service provider measures bandwidth usage at regular intervals throughout the month. At billing time, they discard the top 5% of readings (the 95th percentile) and bill based on the next highest reading. This approach lets you avoid continuously subscribing to a higher-priced service level.

For example, let's assume you typically use 150-175 Mbps of bandwidth, but occasionally need up to 800 Mbps during software updates or backup operations. Instead of paying monthly for a fixed 1 Gbps circuit, you could purchase a 1 Gbps burstable circuit with a 200 Mbps commitment. You'll save a significant monthly cost while still handling those peak usage times when needed.

Right-sizing your circuits requires visibility into actual bandwidth consumption. Implement network monitoring tools that give you detailed utilization metrics. Then, review the data quarterly to identify optimization opportunities and improve network resource planning.

4. Replace PRI Lines with SIP Trunking

Legacy PRI technology forces organizations to add voice capacity in fixed 23-channel blocks. This solution often creates unnecessary expenses and sunk costs, which leads to either overpaying for unused capacity or suffering from capacity constraints.

SIP trunking offers a more flexible and cost-effective solution that provides scalability. With SIP trunking, you can:

• Add or remove individual channels as needed instead of purchasing in fixed blocks

• Eliminate expensive on-premises hardware required for PRI termination

• Reduce long-distance and international calling costs with lower per-minute rates

• Consolidate voice and data over the same network infrastructure

It offers even more significant cost savings for enterprises with multiple locations and complex network architecture. Traditionally, each location would traditionally require its own PRI circuits. However, SIP trunking allows centralized management with capacity shared across locations.

Implementing SIP trunking requires ensuring your network has sufficient bandwidth and quality of service capabilities to maintain call quality. But the transition typically delivers 30-50% savings compared to equivalent PRI services.

5. Adopt UCaaS Instead of Premise-Based Phone Systems

Traditional on-premises PBX systems require significant upfront investment in hardware, ongoing maintenance costs, and expensive software upgrades. These systems also lack the flexibility to easily adapt to changing business needs.

Unified communications as a service (UCaaS) consolidates voice, video, messaging, and collaboration tools into a cloud-based platform. This approach removes the need for expensive on-premises hardware while allowing for more cost-effective network management.

UCaaS delivers cost savings by eliminating capital expenditures on hardware, reducing maintenance costs, and removing the need for specialized telephony expertise. In addition, these cloud services include built-in disaster recovery capabilities that previously required separate investments.

Compared to legacy phone systems, UCaaS can substantially reduce budget requirements. The most effective implementations include thorough planning around network requirements, user training, and integration with existing business applications.

6. Maintain a Live Network Service Inventory and Run Recurring Contract Audits

In-depth evaluations of your network inventory often reveal major discrepancies between what's documented and what's actually deployed. This lack of visibility leads to paying for unused services, missing opportunities to renegotiate contracts, and failing to identify billing errors.

A live network service inventory provides:

• Complete visibility into all services, contracts, and configurations

• Alerts before renewal deadlines to avoid costly auto-renewals

• Accurate billing verification against contracted rates

• Identification of unused or underutilized services

• Quick access to circuit IDs and support contacts when issues arise

If you need a good way to start documenting your network services, we have a free downloadable spreadsheet template you can get started with here.

Conducting regular contract audits also gives you actionable insights, helping you identify underutilized network resources, adjust capacity for real-time data and network traffic requirements, and eliminate redundant network components. A structured audit process (like the one outlined here) helps ensure high availability and support software-defined networking initiatives like SD-WAN and SDN deployments.

As you can imagine, maintaining all of this manually is extraordinarily painful. Your team likely tracks circuits and contracts across multiple spreadsheets that quickly become outdated. Contract renewal dates slip through the cracks, and pulling together a comprehensive view of your network for budget planning becomes a multi-day project requiring input from three different departments. 

Most IT teams simply don't have the bandwidth to maintain accurate records while also keeping the network running. The time investment required to track every circuit, contract term, and monthly charge across dozens of providers is overwhelming. This is precisely why so many organizations continue overpaying long after contracts should have been renegotiated or services decommissioned.

Luckily, there’s a better way…

7. Use Lightyear to Automate Your Telecom Lifecycle

There's no need to manage your live network service inventory or contract audit process manually. Lightyear is designed to transform the entire telecom management process from manual, error-prone work into a data-driven, automated system.

Lightyear's Procurement platform simplifies the process of acquiring new telecom services. It automates RFP creation, handles vendor quoting, and manages implementation from start to finish.

With Procurement, enterprise teams can create detailed requirements in minutes rather than days, receive competitive quotes from relevant providers, and track progress throughout the implementation process. This approach typically cuts procurement time by over 50% while helping teams select better solutions at lower costs.

Lightyear's Network Inventory Manager solves the challenge of maintaining accurate telecom records. It creates a digital system of record that tracks over 30 data points for each service, including technical specifications, contract details, and account information.

This platform automates lifecycle management workflows like MACD requests and sends timely notifications for contract renewals. This visibility eliminates the common problem of paying for forgotten or unused services.

Lightyear's Bill Consolidation tool combines all telecom invoices into a single monthly payment. Instead of managing dozens of vendor relationships and payment processes, enterprises receive one comprehensive bill.

The system checks invoices for errors and provides detailed spending analytics. This consolidation eliminates the risk of service disruptions due to missed payments while making financial tracking and reporting more straightforward.

With Lightyear, a Fortune 500 hardware manufacturer achieved 25% network cost savings through better procurement and 50% time savings for the engineering team. The company also gained full inventory visibility across hundreds of global facilities and measurable network performance improvements.

According to the company's Network and Telecom Services Lead, understanding the broader marketplace would have been impossible for the team to accomplish independently. By relying on Lightyear to automate routine telecom management tasks, the company was able to redirect valuable engineering resources toward more strategic initiatives.

Automate your enterprise telecom lifecycle with software that leverages the best network and pricing intelligence on the market. Learn more about Lightyear here.