By Tanya Seda, Chief Strategy Officer
Over the past few months, we have been asked by a number of C-level executives to describe the most identifiable and quantifiable benefits of a Telecom Expense Management (TEM) implementation. This is particularly interesting to me because in our experience while the IT and Finance teams “get it” early on, it can be a difficult—and even daunting– task to get board or executive leadership buy-in, at least initially. With educating all the skeptical CxOs out there, we decided to jot down a few thoughts around the payback of a TEM solution. It’s not only the opinion of Network Control, but also valued research firm Gartner. They regularly monitor and review the value a TEM solution delivers to the enterprise in terms of cost savings, an accurate inventory of all services and a single-pane view into all the services and expenses globally for IT.
Whether you’re getting a new TEM project approved, working to show the value of a recent implementation, or replacing a TEM vendor – we have compiled a list of the most common and clearest benefits categories along with a measurement for each category to help quantify your results:
TEM improves the tracking and accounting for of all wired and wireless inventory. Strong inventory planning capabilities is what provides the greatest benefit. Having the right inventory in the right location to meet customer or vendor demand is the name of the game for any business. Measuring the number of telecom categories is one way to monitor the effectiveness of TEM planning processes.
Equally important is avoiding new hire equipment gaps (particularly mobile devices) by having excess inventory available; but excess inventory requires excess space and ties up capital which could be used elsewhere. Monitoring the “number of device supply” for each employee and comparing it to future new hiring projection data allows a business to better forecast demand. That, in turn, measurably reduces current inventory spend while still ensuring that devices will be available as needed for new hires.
Do you have the Circuit ID Information required for trouble-tickets, the physical location of the service, the contract commitment and term, hardware attached to the circuit and more? Most companies don’t. But with the right inventory you can, and it is estimated that companies can reduce excess services by 3-8% with an accurate and valid inventory.
Many companies adopt TEM software from a desire or need to change an organization’s internal IT delivery model, manage expenses, and inventory or improve capabilities. Perhaps the new TEM solution will replace an older, in-house application, processes and/or a way to free up needed IT time from “legacy” functions. Either way, reducing in-house down time, in-house development costs and time savings for employees are clear ways of seeing ROI from TEM software.
Often an implementation of TEM software coincides with a change of voice or data application. In some cases, a deployment from on-premise MACD application to a Cloud SaaS environment is taking place; in those cases reductions in current and future IT infrastructure requirements can and should be calculated and included. With a modern TEM solution these shifts in IT delivery models can be clearly measured and tracked.
While Accounting activities follow set closing and reporting cycles, TEM systems can support timely posting of financial transactions across all facets of the wired and wireless business. By integrating these transactional activities, a business is able to see an interim financial picture of operations, and highlights Budget versus Actual (BVA) trends that might need attention. Finding out about budget shortfalls after the fact doesn’t allow for any corrective action. If the TEM provider has a contract management team, they can incorporate those activities in the oversight for further cost avoidance measures and related savings. By allowing your TEM partner to pay your telco invoices you will eliminate the requirement and time it takes your AP team to validate, authorize and cut checks or perform ACH wire transfers. At an average cost of $12-$30 to process invoices, it can be a huge cost savings opportunity; it also safeguards from inadvertent service disconnects as a result of late payment or checks lost in the mail.
In today’s business world, all enterprises must establish and document compliance with the requirements of various security, HIPPA, SOC, tax and regulatory agencies. These requirements place a significant burden on internal processes and staff. The implementation of TEM software can significantly improve compliance and the auditability of an organization’s records, reducing risk of time and fines as well as the cost of compliance by keeping an updated asset records.
To sum up, while there many other reasons why a telecom expense management solution is of considerable business value, driving down costs, gaining predictive control of future requirements, reducing staff work effort and preventing unnecessary spend on equipment and infrastructure stand out as clearly measurable and understandable measures of the return on a TEM investment.