How to Select the Right Telecom Expense Management Vendor - Part 1

Posted by John Venditti on Apr 28, 2011 9:11:00 PM

In telecom expense management, TEM, telecom billing

Telecom Expense Management Cost SavingsIn today’s economic climate, Telecom Expense Management (TEM) is one of the most important cost-saving functions within an organization. The expense of telecommunications (voice, data, wireless) is now a focal point within organizations looking to reduce costs and improve staff productivity. Companies of all sizes rely on telecom systems for mission critical functions ranging from sales to service to customer relationship management. Nearly every crucial contact with customers, vendors and partners is dependent on a high functioning telecom system delivering to its maximum potential.

A Fortune 500 company will spend upwards of $100 million on telecom expenses per year with the average mid-market enterprise spending $25 million. Administrative work, including the processing of orders and invoices, encompasses over 33% of a company’s telecom staff time. Therefore, companies will ultimately benefit from implementing a TEM solution—as either a hosted service or an in-house licensed application.


Selecting the Right TEM Vendor


Enterprise Challenges

As organizations look to find cost-savings during this challenging economic period, TEM provides the opportunity to accomplish this. Through automation, an enterprise’s yearly telecom spend will be reduced 15%–25% by increasing operational efficiency and effectiveness, providing insight into business unit costs and alignment, and increased leverage for contract negotiations through the understanding of current asset needs/requirements, including wireless spend.

Challenges include:

Lack of Visibility – Telecom departments do yeoman’s work, however, most lack a centralized database to track, audit, and report on an organizations overall telecom spend. This creates a significant roadblock when it comes time to budget or renegotiate vendor contracts.

Business Analytics/Reporting – Through automation, a robust Business Analytics tool should alert users real-time to potential problems, provide drill-down capability to the most granular level, allow visibility into financial controls for telecom expenses, and possess the ability to develop customized ad-hoc reports.

Varying TEM Go-To-Market Strategies – Some companies choose to develop and support their own branded and hosted software. In doing so, these companies face the challenge of adoption in the face of internal solutions. TEM vendors will offer a licensed product or managed service, which allow enterprises to outsource parts of expense management (i.e., single invoice payments, dispute management) that fall outside their core competencies. This approach allows enterprises the ability to focus on running their business and not worry about non-value added functions.

Implementation Time – Organizations often get disheartened and lose sight of the potential ROI. TEM vendors who can provide assistance in the creation of ROI documentation for use in the budgeting process show a true commitment to improving a company’s bottom line. Enterprises should select and partner with a TEM vendor with a documented history of successful on-time implementations and who value a process centric methodology.

In Part 2 - Learn how to rate and select a TEM vendor.


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