Building a Business Case for Telecom Expense Management (TEM)
How much money are you wasting? Specifically, how much are you wasting on telecommunications services and equipment? For that matter, how many telecom accounts and how many phones and related equipment are floating around your organization?
One thing is for certain; the larger your organization is the larger your investment in telecom services and products and, in all likelihood, the more time, money, and talent you’re wasting that can and should be recaptured.
The Least Recognized Indirect Costs - Talent
One of the least recognized indirect costs of operations like telecom are the time and talent of the people assigned to manage it. Often these are people who already have a full-time job. As the organization grows and the complexity of telecom investments expands these people end up spending a larger and larger proportion of their time checking bills, following up identified errors, and running around trying to find out who has what, and who is actually using what they have.
Often the people who are assigned these tasks have little or no experience or even familiarity with the required processes, including those inside their own company. Finance may change the chart of accounts periodically creating changes in accounts that expenses must be assigned to. Vendors may not be properly cross-referenced especially when their billing is still manual on paper.
Perhaps the biggest complication is that this is not a one-time event. You may eventually be able to capture documentation of every telecom contract your company is engaged in, and even confirm where every piece of equipment in your inventory is. If you’re really good, you may even confirm that the people who have them are still employed by your company and are actively using them. But as soon as you have, changes will continue taking place and your accuracy begins to slip away. The only solution is for the responsible people to be constantly chasing the information in an attempt to keep up with it. More and more of their time pulled away from their core mission.
Imagine what they could accomplish if they had that time back!
The Vulnerabilities of Your Telecom Estate
Those who have been tracking telecom for their company will be familiar with the term “telecom estate.” It refers to all the investments your company has made and continues to make in telecom assets.
A few decades back, companies started realizing that telecom carriers were error-prone in their billing practices, and usually in their own favor. The real surprise was the extent of the errors. Business managers with no time available to check the bills more thoroughly found help in the form of consultants who offered to do that work for them. This was the beginning of the respected business discipline that is Telecom Expense Management (TEM).
At that time companies figured that having an audit performed once every few years would suffice, but as those audits proceeded, they realized more and more how the time between them created unbelievable increases in duplication, loss, and waste. Clearly, a constant TEM discipline of vigilance was required.
The core function of TEM remains the same today, protect the telecom estate of client companies and rectify any errors or omissions that cause waste as quickly as possible. Errors range from simple billing errors to services that were scheduled to be shut down but remain active, equipment and services still being paid for when their user has left the organization long ago. Estimates range, but the typical large organization can anticipate that 10% of their telecom spend may be completely wasted.
Today’s TEM expert is so confident of this that they are happy to “put their money where their mouth is” and offer to explore the telecom estate on contingency. Their fee, then, is a percentage of the savings their work creates. More about that later.
Value Beyond Savings
It’s easy to point at hard dollar savings achieved by TEM, but there’s so much more value to be had. This is mainly because all companies and organizations are so much more dependent upon telecom than they have ever been, and that dependency is only growing as telecom and information management technologies converge.
When your inventory of available contracted telecom services and telecom equipment is current and accurate the needs of your personnel can be filled far faster than ever before. The wait for provisioning of many telecom services is legendary, but you may often already have what you need in inventory and available.
Redundancies can be eliminated, billing for services no longer in use no longer bleed money from the budget. The telecom estate becomes a more strategic advantage the more accurate your inventory is. Knowing exactly what you have, what you’ve used, enables the company to be far more aggressive when negotiating better terms and conditions for telecom services, which increases buying power significantly.
Return on TEM
Imagine receiving back 10% of what you spent on telecom last year. Even if you’re paying a portion of it to someone to perform TEM for you, it’s a substantial recovery. Also, today’s TEM expert is far better prepared than you are to do the diligence required to capture every error and every opportunity for telecom savings. Extensive use is made of automation, including the emerging robotic process automation (RPA) and artificial intelligence (AI) technologies that are exploding in today’s market. These techniques are complemented by teams of highly trained and extensively experienced TEM experts who interpret the data and prescribe immediate action.
The return on these TEM investments come not only from the identification and rectification of errors, but also from the returned availability of your own personnel resources ready to perform the higher value work you hired them to perform. Also, from the agility created when you know exactly what assets you own and can bring to bear quickly to solve business challenges.
Consequences of Doing Nothing
As those early TEM consulting clients discovered decades ago, the longer the period in which you take no action, the more the challenge grows exponentially. You really can’t afford to wait. You may try to solve the problem in-house by assigning top resources to attack it. But while they’re inventing the next great TEM spreadsheet your procurement and finance people are drowning in unpaid invoices and their managers are waiting for more and more critical reports to guide their actions. In larger organizations we’re talking about multimillion-dollar contracts. That estimated 10% loss in the context of these may itself be in the multi-millions.
It’s All About the Inventory
Your telecom estate consists of an inventory of contracts and equipment. The more closely you manage this inventory the more you protect your organization’s bottom line.
Calero-MDSL is all about your telecom estate and the inventory of contracts and equipment that you need managed. Our industry leading TEM software automates many of the processes that may be keeping you and/or your team in the office long after hours and into weekends. Our experts help clients extract every drop of value from their telecom investments. We approach your estate objectively with a fresh set of eyes and always identify hidden unnecessary expenses.
Talk to us and let us help you build your business case for reaching out for our help. Saving money, improving resource utilization, and keeping a careful eye on expenses combine to create an excellent expense management strategy.