Telecommunication Costs

Telecom expense management software has arrived.

As a professional telecommunications audit professional, I’ve been bucking the Telecommunications Expense Management (TEM) software trend for many years now.  But lately,  I’ve come around as I’ve seen the magic and technological wizardry and ultimate cost savings first hand that TEM truly offers. I am sold on TEM and I’m ready to tell the world that TEM has finally arrived and is truly ready for prime time.  As I’ve reviewed and sat in on various TEM presentations and as a CEO of a company myself, and have now actually used many of the TEM software applications, I must say I’m now convinced that TEM software helps me better manage company costs and reduce expense.  If it is good enough for me, it’s good enough for my telecom audit clients.  Perhaps we should even change the name from telecom expense management software to telecom audit software.

TEM software offers value and allows for automated telecom audit and telecom service reviews which ultimately results in significant cost savings for many kinds of businesses.  TEM software can help businesses not only save money on their telecommunications services but also allow for far better control over invoices.  Control is so very important because telecom billing across the large business enterprise is so complicated and many enterprises have lost the ability to consistently have control over telecommunications expense.  Cost savings and control was something that traditionally only human auditors could accomplish, however, automated TEM software tools compliment the skills of the human auditor.

Does this mean that the manual telecommunications audit is dead and that telecom auditors are a dying breed?  No, however, the further that I delve into what TEM has to offer and see the benefits, the more that it is evident that both the manual audit and automated TEM tools can co-exist and actually benefit and compliment one another.  In fact, traditional auditors can still add value to the TEM marketplace and like myself, they can successfully offer TEM software applications to their clients because it finds errors that a human auditor can easily miss.

Here is a breakdown of what TEM software now offers businesses and how it can help with the telecommunications audit process:

Ability to reap huge telecom cost savings and establish control over telecom services and billing
Effectively Identify, track and file billing disputes
Robust reporting package
Centralization, simplification of the telecommunications billing network
Online access to the program from anywhere
Software backup of TEM program
Allocate costs to all or some users and cost centers
Successfully audit a wide range of telecom services effectively
Compliment a manual telecom audit
All billing media can be loaded into the program
Best pricing advantage across the enterprise
Increased speed of processing telecommunications invoices, approval and audit
Increased Budgeting effectiveness
Better ordering processes for new services
Telecom Billing interpretation and review in foreign languages
Inventory telecom

Finally, the reporting function of TEM is absolutely phenomenal.  For example, if you need budget numbers and breakdown by cost centers (we always do) I now have immediate information and not just a summary of the total telecom spend across the enterprise.  I can now break spend down by company telecom services, geographical location or cost center in a matter of minutes instead of days.  I can break down telecom spend data in so many ways now and so can you.   Invoice error and exception reports are available with a keystroke each month.  Once you locate the errors, you can send off a email note to the carrier with your refund request, all in the same process.

In summary, things usually change for the better and so has traditional telecom auditing and TEM.  It is time to examine TEM for your enterprise and use this great tool to compliment the skills we as telecom auditors have honed so well over the years.

Business telecom expense management software has arrived.

As a professional telecommunications audit professional, I’ve been bucking the Telecommunications Expense Management (TEM) software trend for many years now.  But lately,  I’ve come around as I’ve seen the magic and technological wizardry and ultimate cost savings first hand that TEM truly offers. I am sold on TEM and I’m ready to tell the world that TEM has finally arrived and is truly ready for prime time.  As I’ve reviewed and sat in on various TEM presentations and as a CEO of a company myself, and have now actually used many of the TEM software applications, I must say I’m now convinced that TEM software helps me better manage company costs and reduce expense.  If it is good enough for me, it’s good enough for my telecom audit clients.  Perhaps we should even change the name from telecom expense management software to telecom audit software.

TEM software offers value and allows for automated telecom audit and telecom service reviews which ultimately results in significant cost savings for many kinds of businesses.  TEM software can help businesses not only save money on their telecommunications services but also allow for far better control over invoices.  Control is so very important because telecom billing across the large business enterprise is so complicated and many enterprises have lost the ability to consistently have control over telecommunications expense.  Cost savings and control was something that traditionally only human auditors could accomplish, however, automated TEM software tools compliment the skills of the human auditor.

Does this mean that the manual telecommunications audit is dead and that telecom auditors are a dying breed?  No, however, the further that I delve into what TEM has to offer and see the benefits, the more that it is evident that both the manual audit and automated TEM tools can co-exist and actually benefit and compliment one another.  In fact, traditional auditors can still add value to the TEM marketplace and like myself, they can successfully offer TEM software applications to their clients because it finds errors that a human auditor can easily miss.

Here is a breakdown of what TEM software now offers businesses and how it can help with the telecommunications audit process:

Ability to reap huge telecom cost savings and establish control over telecom services and billing
Effectively Identify, track and file billing disputes
Robust reporting package
Centralization, simplification of the telecommunications billing network
Online access to the program from anywhere
Software backup of TEM program
Allocate costs to all or some users and cost centers
Successfully audit a wide range of telecom services effectively
Compliment a manual telecom audit
All billing media can be loaded into the program
Best pricing advantage across the enterprise
Increased speed of processing telecommunications invoices, approval and audit
Increased Budgeting effectiveness
Better ordering processes for new services
Telecom Billing interpretation and review in foreign languages
Inventory telecom

Finally, the reporting function of TEM is absolutely phenomenal.  For example, if you need budget numbers and breakdown by cost centers (we always do) I now have immediate information and not just a summary of the total telecom spend across the enterprise.  I can now break spend down by company telecom services, geographical location or cost center in a matter of minutes instead of days.  I can break down telecom spend data in so many ways now and so can you.   Invoice error and exception reports are available with a keystroke each month.  Once you locate the errors, you can send off a email note to the carrier with your refund request, all in the same process.

In summary, things usually change for the better and so has traditional telecom auditing and TEM.  It is time to examine TEM for your enterprise and use this great tool to compliment the skills we as telecom auditors have honed so well over the years.

What is TEM?

Telecom Expense Management (TEM) is a term used to define an approach to managing all telecommunication service expenses such as voice, data and wireless with a combination of software tools and manual auditing. In managing all these services and related processes, its goal is to minimize costs and maximize process efficiency.

For a small company, it can be as simple as checking over your phone bill every month to make sure you aren’t billed for services you don’t want. For larger companies, it is a more formal program to optimize spending on telecom services. Most of the attention goes to bill auditing and getting refunds for billing errors, but an effective TEM program can do more than that.

A Little History

The cost of voice and data communications is dropping. One casualty of this price plummet is that you no longer have experienced account teams who know your account and are your single point of contact. The new breed of account representatives there to serve you is inexperienced with your telecom needs and is more sales-oriented than needs-oriented.

For many businesses the overall telecommunications expense is growing. Workers are more mobile and the amount of communications between companies and their employees, including the huge volume of information they exchange, has been growing as well. Email, Internet, PDAs, ecommerce and our increasing tele-commuting workforce all lead to an increased demand for instant and continuous exchange of information using many kinds of telecom devices. The increased complexity of devices and services and the lack of transparency in carrier charging models have led to confusion and a need for a way to manage and control telecom costs.

In today’s business landscape, many companies are downsizing support staff, carriers are providing less support, and communication in general is becoming larger and more complex. Out of all this confusion, Telecommunications Expense Management was born. TEM provides a structured and professional way to manage the telecom spending of a company, no matter how large or small. This management can be in the form of software used by a manager or an outside telecom expert.

What Are the Problems?

There are quite a few. These include but are not limited to:

1) Using multiple carriers for different services that use different invoice formats. This makes it difficult to match and allocate costs effectively;

2) Not having a complete inventory of the company’s assets including wireless devices, headsets, hardware, computer networks, etc.;

3) Difficulty in being able to apportion telecommunications costs to divisions, teams or departments with any accuracy;

4) Not having the company resources to manually audit each invoice. Between 7-12% of bills are in error. For large companies, this is a substantial amount of money they could be losing every month; and

5) Not understanding costs. You can’t control the cost of something when you don’t understand how it’s billed or what you’re getting for your money.

What are the Benefits?

Managing telecom services is complex and requires constant attention. A qualified telecom expert can not only perform systematic audits but can also alert the company to new cost-saving options. Software programs can allow companies to eliminate waste and optimize resources.

Both software and outside experts can help you to: reduce time through systematized processes; reduce costs through error identification; reduce risks through better reporting options; and increase control and thereby accountability.

Software will help the Telecom Manager’s knowledge and understanding of the products, services and costs for his company’s telecom spending. An outside expert can handle disputes with carriers and get price quotes for new services. They can also restructure your agreements and contracts with current providers and find less expensive providers.

A solid TEM platform will provide a centralized solution for inventory control and procurement, contract compliance, budget and spending tracking, and invoice processing. Proactive systems can alert you to policy breaches and contract compliances.

Large companies are the prime candidates for Telecom Expense Management. However, small and mid-size companies that need to organize and monitor their telecom spending would benefit as well.

For most small to mid-size companies telecom spending is the responsibility of an IT person, an office manager, an accountant or a combination of all three. For these types of organizations, the benefit of a TEM solution is based on labor saving efficiencies through automation. This benefits both telecom and financial sides of the company by providing a way for them both to monitor, control and report on company telecom.

Considering the importance of telecommunications in the operation of your daily business, Telecom Expense Management is a critical business strategy. Your company needs to not only track its spending, but also to maximize its telecom resources. TEM lets you make informed decisions rather than educated guesses.

Business telecom expense management software has arrived.

As a professional telecommunications audit professional, I’ve been bucking the Telecommunications Expense Management (TEM) software trend for many years now.  But lately,  I’ve come around as I’ve seen the magic and technological wizardry and ultimate cost savings first hand that TEM truly offers. I am sold on TEM and I’m ready to tell the world that TEM has finally arrived and is truly ready for prime time.  As I’ve reviewed and sat in on various TEM presentations and as a CEO of a company myself, and have now actually used many of the TEM software applications, I must say I’m now convinced that TEM software helps me better manage company costs and reduce expense.  If it is good enough for me, it’s good enough for my telecom audit clients.  Perhaps we should even change the name from telecom expense management software to telecom audit software.

TEM software offers value and allows for automated telecom audit and telecom service reviews which ultimately results in significant cost savings for many kinds of businesses.  TEM software can help businesses not only save money on their telecommunications services but also allow for far better control over invoices.  Control is so very important because telecom billing across the large business enterprise is so complicated and many enterprises have lost the ability to consistently have control over telecommunications expense.  Cost savings and control was something that traditionally only human auditors could accomplish, however, automated TEM software tools compliment the skills of the human auditor.

Does this mean that the manual telecommunications audit is dead and that telecom auditors are a dying breed?  No, however, the further that I delve into what TEM has to offer and see the benefits, the more that it is evident that both the manual audit and automated TEM tools can co-exist and actually benefit and compliment one another.  In fact, traditional auditors can still add value to the TEM marketplace and like myself, they can successfully offer TEM software applications to their clients because it finds errors that a human auditor can easily miss.

Here is a breakdown of what TEM software now offers businesses and how it can help with the telecommunications audit process:

Ability to reap huge telecom cost savings and establish control over telecom services and billing
Effectively Identify, track and file billing disputes
Robust reporting package
Centralization, simplification of the telecommunications billing network
Online access to the program from anywhere
Software backup of TEM program
Allocate costs to all or some users and cost centers
Successfully audit a wide range of telecom services effectively
Compliment a manual telecom audit
All billing media can be loaded into the program
Best pricing advantage across the enterprise
Increased speed of processing telecommunications invoices, approval and audit
Increased Budgeting effectiveness
Better ordering processes for new services
Telecom Billing interpretation and review in foreign languages
Inventory telecom

Finally, the reporting function of TEM is absolutely phenomenal.  For example, if you need budget numbers and breakdown by cost centers (we always do) I now have immediate information and not just a summary of the total telecom spend across the enterprise.  I can now break spend down by company telecom services, geographical location or cost center in a matter of minutes instead of days.  I can break down telecom spend data in so many ways now and so can you.   Invoice error and exception reports are available with a keystroke each month.  Once you locate the errors, you can send off a email note to the carrier with your refund request, all in the same process.

In summary, things usually change for the better and so has traditional telecom auditing and TEM.  It is time to examine TEM for your enterprise and use this great tool to compliment the skills we as telecom auditors have honed so well over the years.

What is TEM?

Telecom Expense Management (TEM) is a term used to define an approach to managing all telecommunication service expenses such as voice, data and wireless with a combination of software tools and manual auditing. In managing all these services and related processes, its goal is to minimize costs and maximize process efficiency.

For a small company, it can be as simple as checking over your phone bill every month to make sure you aren’t billed for services you don’t want. For larger companies, it is a more formal program to optimize spending on telecom services. Most of the attention goes to bill auditing and getting refunds for billing errors, but an effective TEM program can do more than that.

A Little History

The cost of voice and data communications is dropping. One casualty of this price plummet is that you no longer have experienced account teams who know your account and are your single point of contact. The new breed of account representatives there to serve you is inexperienced with your telecom needs and is more sales-oriented than needs-oriented.

For many businesses the overall telecommunications expense is growing. Workers are more mobile and the amount of communications between companies and their employees, including the huge volume of information they exchange, has been growing as well. Email, Internet, PDAs, ecommerce and our increasing tele-commuting workforce all lead to an increased demand for instant and continuous exchange of information using many kinds of telecom devices. The increased complexity of devices and services and the lack of transparency in carrier charging models have led to confusion and a need for a way to manage and control telecom costs.

In today’s business landscape, many companies are downsizing support staff, carriers are providing less support, and communication in general is becoming larger and more complex. Out of all this confusion, Telecommunications Expense Management was born. TEM provides a structured and professional way to manage the telecom spending of a company, no matter how large or small. This management can be in the form of software used by a manager or an outside telecom expert.

What Are the Problems?

There are quite a few. These include but are not limited to:

1) Using multiple carriers for different services that use different invoice formats. This makes it difficult to match and allocate costs effectively;

2) Not having a complete inventory of the company’s assets including wireless devices, headsets, hardware, computer networks, etc.;

3) Difficulty in being able to apportion telecommunications costs to divisions, teams or departments with any accuracy;

4) Not having the company resources to manually audit each invoice. Between 7-12% of bills are in error. For large companies, this is a substantial amount of money they could be losing every month; and

5) Not understanding costs. You can’t control the cost of something when you don’t understand how it’s billed or what you’re getting for your money.

What are the Benefits?

Managing telecom services is complex and requires constant attention. A qualified telecom expert can not only perform systematic audits but can also alert the company to new cost-saving options. Software programs can allow companies to eliminate waste and optimize resources.

Both software and outside experts can help you to: reduce time through systematized processes; reduce costs through error identification; reduce risks through better reporting options; and increase control and thereby accountability.

Software will help the Telecom Manager’s knowledge and understanding of the products, services and costs for his company’s telecom spending. An outside expert can handle disputes with carriers and get price quotes for new services. They can also restructure your agreements and contracts with current providers and find less expensive providers.

A solid TEM platform will provide a centralized solution for inventory control and procurement, contract compliance, budget and spending tracking, and invoice processing. Proactive systems can alert you to policy breaches and contract compliances.

Large companies are the prime candidates for Telecom Expense Management. However, small and mid-size companies that need to organize and monitor their telecom spending would benefit as well.

For most small to mid-size companies telecom spending is the responsibility of an IT person, an office manager, an accountant or a combination of all three. For these types of organizations, the benefit of a TEM solution is based on labor saving efficiencies through automation. This benefits both telecom and financial sides of the company by providing a way for them both to monitor, control and report on company telecom.

Considering the importance of telecommunications in the operation of your daily business, Telecom Expense Management is a critical business strategy. Your company needs to not only track its spending, but also to maximize its telecom resources. TEM lets you make informed decisions rather than educated guesses.

Analyst Observations

Telecom costs equate to 3.6% of a typical company’s entire P&L spend which would explain why “telecommunications expenditure remains near the top of every CIO’s expense list” (Gartner) and why “Telecommunications cost management has become one of the hottest sectors in today’s business process automation marketplace.” (Aberdeen Group)

More than 50% of large enterprises don’t know what they are spending on telecom related services across the company. “In fact, this area is so wrought with inefficiency that most people don’t know how much they spend on telecom services, never mind how they can best manage those budgets.” (Aberdeen Group)

From our experience in this space Xceed has discovered that the difference between ‘average’ and ‘competitive’ rates is as much as 40%. Tellingly, only 5% of the contracts we’ve reviewed could be classed as ‘competitive’.

Historical Overbilling

However, telecoms expense management isn’t simply about negotiating the best contracts; it requires active management of the telecoms providers and a high level of scrutiny when it comes to checking bills.

A staggering 80% of telecoms bills include hidden charges or mis-billing. The traditional approach of “stare & compare” simply isn’t effective. Some global bluechips we know still rely on a plus or minus 10% approach when it comes to paying their telecoms bills – i.e. if it’s + or – 10% of last month’s bill then it gets paid automatically. When you understand your network provider has a large and eclectic collection of billing systems that aren’t always in sync you’ll appreciate that a more stringent approach always pays dividends.

Checking you’re receiving the correct tariff, whilst time consuming, is straight forward enough and can even be done manually – which will yield results. However, for large or even medium sized organisations it just isn’t practical to scrutinise every line of every bill for Mobile, Fixed Line and Data charges. This is where Software as a Service can help as there are tools which, correctly configured, can compare millions of lines of billing data against your contracted tariff in a matter of seconds. We’ve never seen this exercise fail to identify 10% overbilling, frequently much greater, irrespective of the supplier.

If your personal mobile or landline provider routinely added 10%-40% to your monthly bill we don’t think it would be long before you asked for a rebate. Surprisingly, very few businesses have identified this, despite the fact that for many, telecoms comes second or third to staff costs in terms of total spend.

One global blue-chip we know spends over £500m on their telecoms bills but until recently had never gone beyond “stare and compare” as a method of managing this cost

and challenging their suppliers to do better.

You’re legally entitled to recover overbilling and mis-billing for up to six years from your network provider. However, the most dramatic savings are realised when this is one element of a cohesive approach to telecoms and inventory management, as Giga Information Group so snappily states “Bill management should be part of a strategic plan, a step that will reduce enterprise costs and achieve savings in the short term, while creating the infrastructure for streamlining processes and systems and laying the foundations for a long-term solid solution for managing and optimising the provision of communications.”

Zero Usage & Inventory Management

TEM starts to get a little more complex when you look into the number of zero or low usage lines, closed locations, high usage, non-business related charges and other aspects of variable expenditure. There are two aspects to this area of TEM:

First is the inventory or telecoms asset management aspect. Between 15% and 35% of all fixed telecoms assets are surplus to requirements. The number of lines being paid for rarely matches the number you’re actually using, which goes across fixed line, mobile and data networks. Recently we came across a famous computer gaming company which was paying €18,000 per month for a high-speed pipe into its Madrid office. This had been paid for 18 months, without question; until we pointed out that it had never been used. Not once. Ever.

Changing Practices

So far nothing we’ve outlined carries any risk to the business when it comes to implementing the savings that are identified. The areas that do carry an element of risk are those which involve changing practices. This includes high-usage, non-business related calls and other aspects of variable cost.

A simple example is people frequently using 118 or 0870 numbers, usage of which is commonly covered by company policy or by simply making the numbers unavailable. But

how many times do your organisation’s landlines get routed externally for internal calls? How often are your Blackberrys calling other company Blackberrys but being charged at standard mobile rates? Not many Telecoms Managers let alone Executives can answer these questions but there are real savings to be made in this area.

There are also specialist tools and companies which can give you the answers or the tools to get the answers yourselves. The only slight risk is ensuring that any change in working practice doesn’t affect your business.

In short, good Telecoms Expense Management is as much about asset register or inventory management as it is about bill management.

We’ve found it is important to treat Telecoms Expense Management as a standalone project, covering the full breadth of Fixed Line, Mobile & Data Networks, from both a fixed and variable cost perspective. By combining the various elements mentioned in a comprehensive TEM project we’re sure you’ll identify at least 20% savings and in extreme cases you’ll save over 50% of your current spend.

Current Market

A number of companies are currently doing exactly this and in many ways it is the US leading the way. TEM is an established, billion dollar industry in the States. Major US corporations like American Express and Bank of America are rolling out comprehensive TEM solutions across their global estates. Both American Express and BoA have opted for one of the US market leaders, who offer a comprehensive TEM solution which includes installing TEM hardware on the client site.

By comparison the UK is significantly behind with no clear market leader for Telecoms Expense Management and very few organisations understand there’s more to TEM than the recovery of historical overbilling.

Search for TEM companies in the UK and you’ll predominantly find Procurement Consultancies which offer a bill checking and recovery service which is conducted manually. There are also air-time resellers who offer Telecoms Expense Management as a pre-cursor to selling you their telecoms services but there are also a few UK centric

companies and products that specialise in TEM and offer independent consultancy with the right software for the job.

The best approaches we’ve seen include a comprehensive review of the current inventory along with powerful software to eliminate or recover over-billing. For sustainable savings the ultimate solution lies in Software as a Service (SaaS) or a bureau / managed service which can manage your asset register at the same time as precisely checking each month’s itemized billing. This helps to ensure you maintain an up to date and accurate telecoms asset inventory (which in itself can be invaluable in managing office relocations and IT integrations) at the same time as driving year on year savings which are typically in the region of 10%-15% when using TEM specific software.

Conclusion

So should you be interested in Telecoms Expense Management?

Let’s put it this way; if you could save 1.44% of your entire P&L spend without impacting the performance, morale or service of your organisation, would you? Of course you would.

This is effectively the opportunity on offer from the leading Telecom Expense Management firms. We’ve seen an average of 40% savings on over 20 TEM projects which we’ve monitored. So with Telecoms costs equating to an average of 3.6% of a company’s entire P&L spend it’s reasonable to argue that 1.4% of your P&L spend can be removed with minimal risk.

So, should you be interested in Telecoms Expense Management?

Emphatically; Yes.