Introduction to Telecom Expense Management

By Anup Abraham
Introduction

You are probably thinking: "telecom expense management, what on earth is telecom expense management?" It's a good thing that we did not start this article with the acronym "TEM" because you would have been even more lost.

So, telecom expense management, or TEM for short - why do you care enough to read further?

Today enterprises rely on an extensive network of voice, data and wireless services to conduct business. These services cost any enterprise an enormous amount of money. To make matters even more confusing, the telecommunications service provider environment is complex and constantly changing with mergers, new vendors and changing services.

Large enterprises face challenges managing this dynamic environment and controlling these. Telecom expense management is a disciplined process for managing telecommunications and telecommunications expenses that can help any enterprise to save substantial amounts of money - potentially hundreds of thousands of dollars (now that should have caught your attention and made you want to read further). A successful TEM process enables organizations to evaluate, simplify and manage complex telecom expenditures. This article will describe TEM and the issues it solves, and of course, how it can save you money.

Telecom Expense Management is a Process

To manage telecom services and telecommunications costs, companies have implemented a process known as Telecom Expense Management, or TEM. TEM is an end-to-end business process intended to manage the entire telecom lifecycle, which includes but is not limited to the following:

• Ordering and procuring telecom services
• Managing an inventory of telecom services while tying them back to locations and people
• Billing management including bill processing, auditing and reconciliation
• Contract management and validation
• Paying for services

The TEM process accomplishes several objectives:

• Effectively manage the inventory of services to locations and workers who are geographically dispersed
• Optimize the entire telecom infrastructure
• Identify errors in telecom billing (most of which are in the carriers favor) leading to refunds
• Obtain the most advantageous pricing when sourcing telecom services

Implementing a telecom expense management process includes the following steps:

• Collecting information about telecom accounts, locations, and employees
• Converting the data into an electronic format so that it may be easily managed and maintained
• Determining if problems are caused internally (the fault of the company) or externally (the fault of the carrier)
• Enforcing existing company policies or creating new processes to deal with internal issues
• Obtaining credits from telecom carriers for erroneous billing

So at this point you're thinking, this sounds like a lot of work, do I save enough to make it worthwhile. The answer to that is an emphatic, "Absolutely"!

So now it is time to "show you the money"...

Generally accepted industry data indicate that as much 10% to 12% of telecommunications charges are erroneous. Most of the errors (85%) are in the telecom vendor's favor. This means that the typical company is spending 8 to 10% more than they need to on the telecommunications services!

Automation to Make it Easy

If saving the money is not enough incentive on its own, the efficiency gains should be enough. The process does not have to be an onerous one. A company can automate the process by employing a telecom expense management solution. An automated solution serves as the central information repository incorporating the company data collected as well as telecom bills which are accepted electronically. It then does the "heavy lifting" by helping to reconcile bills and services identifying the areas of discrepancy.

Conclusion

Telecom expense management serves a critical function within any organization helping them to manage their telecom expenses while providing visibility and actionable insight into the entire procurement-to-payment process. The process can be automated to make it relatively easy, and in the end will save any organization substantial amounts of money. Easy and saving money - what's not to like?

About the Author

Anup Abraham is a Manager at ExcelaCom, Inc. and provides consulting services to major telecos.