Its not Telecom Expense Management, its Telecom Management

The common misperception with Telecom Expense Management is that its primary purpose is to manage the overwhelming quantity of complex and voluminous invoices that need to be paid each month.

Its not!

Let me draw a parallel. Suppose I have a small business that leases 5 cars. Each car costs $1,000 per month plus mileage used. A single invoice arrives once a month and the detail shows the costs for the 5 cars, each identified by the license plate and representing a component of the overall monthly total.

When trying to determine if the invoice is correct, I check with each of my drivers and confirm they still have the car and they accrued the miles detailed on the invoice. Effectively, the invoice itself becomes irrelevant. I need to make sure that I get the value or service from the cars - not the invoice itself.

The telecommunications world is similar to the car scenario, but far more massive. As a consequence we don't have a hope of looking at all the detail and simply elect to check only the front page of each invoice. What have we done? We have moved from paying for the services we use to paying invoices with no real visibility into what they contain. This is a crime!

Each invoice contains the thousands of individual Services that I get from my provider. Each Service attracts recurring charges for the service, plus charges for volume of usage (usually calls). Each of these charges is then further broken down into its component parts and categories resulting in each individual service consume dozens of pages of detail. For a sizeable invoice billing hundreds of thousands of dollars per month, the quantity of these services becomes so large that without a dedicated system, they are simply not going to get checked.

Think of the parallel with the 5 cars. To check each service is correct, I would have to itemize each one and its charges and then refer to the user within my corporation and ask them to check it. In the enterprise telecommunications world, this is usually the IT group.

This is a very relevant point isn't it? For the most part in large organizations, the finance group pays invoices and the IT group use the services. Does finance go and ask IT to check every line item in the invoices they pay every month? Of course not. The result therefore is that invoice are being paid by people without the expertise or information they need to verify them.

The results are obvious. Invoices get bigger and bigger and more and more unwieldy and the percentage of error in them gets bigger and bigger. The outcome is clear - the phone bill is wrong by 10%, 20% or perhaps higher.

What can you do?

It's a question of looking at the problem properly. There is normally a complete disconnect between the IT group and the finance group. Not only are they driven by different objectives; finance need to pay bills and IT need to keep the infrastructure going; but additionally they have quite different skill sets and speak different languages. To compound this, they are dealing with different objects. Finance has a list of thousands of account numbers they deal with and the IT group has tens of thousands of services.

To address the issue, you need to create the flow of information between IT and Finance.

How?

Clearly the issue cannot be resolved with mountains of paper invoices - It is just too much information.

Fortunately invoices can be readily received in electronic form. These invoices contain all the services information that comprise the total invoice (the 5 cars) and all their detail charges. This information is worthless to the finance person, but is exactly what the IT group will understand. So therefore if the information about services the IT group naturally hold to be able to do their job can be compared to charges on the invoice, then you have reconciliation!

Now that we have electronic invoices, this reconciling can be done with software. Features need to include:

1. The ability for IT group to house all services (cellphones, data circuits, voice circuits, air cards, etc.) and their details in a centralized database. What is it? What do I use it for? Who pays for it? Where is it located? And so on. This is your inventory - it's what you need to run your business.
2. The ability to keep this information up to date. The solution must handle Moves, Adds, Changes and Deletions so that every event is captured and keeps the inventory up to date and trustworthy.
3. The ability to hold contract information. "AT&T agreed that I would be charged this schedule of charges for the services in my inventory provided I spend $1m a year with them."
4. The ability to import and break down all of the invoices I get from my service providers and have the system compare the components against the trustworthy inventory that the IT group maintains.
5. The ability to receive information from other systems such as the HR system. "All of these cellphones that are on this invoice belong to these employees and the HR system confirms that they are still active.

What do you get for this?

Easy.. Once the inventory is being reconciled against billing automatically each month, it will highlight discrepancies:

Services on the bills that

• don't exist in the enterprise
• that have been cancelled
• that are at locations since closed
• that belong to employees since terminated
• that don't match the contract rates I agreed to pay.

Additionally, all of the current manual processes for paying invoices becomes automated. If the invoice passes muster, then you get a green light and can pay with the confidence that its right. Imagine that! Only working the exceptions….

Summary

Don't get caught in the trap of just outsourcing the whole mess. There are quality TEM outsourcers out there who are very experienced with telco billing, but regardless of their expertise they clearly need to understand your inventory as well as your IT group does. Ask your potential provider how the moves adds and changes will get to them and update their inventory. The answer is important.

Question whether being able to automate through dedicated software in house would mean the task becomes quite manageable enough to do it yourself.

In a nutshell - whichever path you follow, aim to stop paying invoices and pay for what you need.

It isn't Telecom Expense Management you need to address - its Telecom Management.