Veramark Technologies Journal

Telecom expense management (TEM) can significantly reduce an organization’s telecom expense. But many companies are missing out on these savings for one of the following reasons. Leading TEM vendor Veramark Technologies offers 11 timely tips to ensure your organization isn't making any of these costly TEM mistakes.

1.  No TEM solution. This is the most egregious mistake of all. According to the Aberdeen Group, "Enterprises are forfeiting 12% to 18%" if they do not have a proactive approach to telecom cost management that leverages technology and process improvements. Further more, "Every dollar brought under management drives savings to the bottom line." Even a partial TEM solution can more than pay for itself in telecom savings.

2.  Manage telecom expenses through audits alone. The historical audit is an important tool for defining the initial state of an organization's telecom environment and identifying opportunities for improvement. As a long-term expense management strategy, however, the audit alone fails to maximize sustainable, long-term value. Periodic auditing of an unmanaged telecom environment produces temporary cost reductions separated by intervals during which inefficiencies tend to return to pre-audit levels. Why? Because audits provide only a snapshot of a dynamic system that involves people, processes, and policies - all of which change over time and can dramatically impact telecom use and spend. Technology-enabled TEM solutions help organizations leverage the information gained through an audit to implement permanent process improvements that accommodate changes in the telecom environment and maximize long-term savings.

3.      Select a solution with no business intelligence capabilities. Business intelligence can multiply the value of the data collected by a TEM solution, providing powerful capabilities to analyze trends, monitor performance, and optimize spend. TEM BI can help decision-makers throughout your organization - executives, directors, analysts, and managers - manage expenses more effectively. These are all good reasons for you to make sure that your TEM solution has BI capabilities. Here's another: sooner or later, your competitors will have it. And in this economy, where expense management is the key to bottom line results, you don't want to be spending your telecom dollars less efficiently than your competition.

4.  Choose the wrong TEM provider. There are many providers vying for your TEM business, and they are not all equally qualified or capable of delivering the goods. When shopping for a TEM provider, be sure to look for the following qualities:

• Track record of commitment and success - Is the provider committed to TEM and IT expense management, or is it just a sideline? Have they deployed solutions similar the one they propose for you? How long did implementation take? How long before the solution delivered ROI? Get references!
• Strong and transparent financials - Public companies have open books. Private companies, startups, VC-funded organizations may or may not have a sustainable business model. You want a vendor with staying power, who can support your TEM needs for the long haul. Companies that crop up overnight might disappear just as quickly - leaving you high and dry with an unsupported solution.
• Winning software - A TEM solution is only as good as the software it runs on, so make sure your provider has top-notch technology under the hood. What to look for? A single, integrated platform - not a hodge-podge of cobbled-together applications. A single, shared database. A user-friendly, browser interface. A high degree of user configurability, scalability, and flexibility. The ability to share data with accounting, HR, and other business systems.
• Subject matter experts - Pay attention to who is running the company, architecting the software, leading customer support. Do they have backgrounds that inspire confidence? Do they have high turnover in their TEM support services group? What is the average tenure of the implementation and technical support team? Long-term solutions require long-term commitment. Make sure their top priority is to build the company and serve their customers.
• Expertise in TEM best practices - The industry analysts, including Gartner, Aberdeen Group and AOTMP, have helped articulate TEM and define TEM best practices. Before you choose a TEM provider, find out how their solutions enable and enforce TEM best practices. Look for the provider who offers the greatest coverage. Ability to implement best practices is the key to a successful solution and maximum ROI.
• Comprehensive services - Some TEM providers provide part of the solution and partner with other organizations to provide for the rest. Or worse yet, they leave it to you to fill the gaps. The strongest solutions are those, which are designed, developed, and implemented by a single, tightly-run team with unified leadership. Delivered with user training. Supported by seasoned customer support professionals. And backed by any integration and consulting services you may need.

5.      On-premise deployment - if you are not up to it. It is not surprising that companies that invest in TEM are increasingly opting for a managed services or BPO solution. Not every company is willing - or able - to absorb the demands of managing a TEM solution, no matter how promising. Running an on-premise TEM solution requires a range of skills both broad and deep, from supporting the necessary IT infrastructure, to operating the software, to processing invoices, to handling disputes and contract negotiations with carriers. By outsourcing your TEM solution, you will allow your staff to focus on what they do best, while leveraging the TEM expertise of your provider to do what THEY do best, which is save you money on telecom. Hosted, outsourced TEM solutions also tend to be implemented in a fraction of the time require for on-premise deployment. Which means they can be live and saving you money that much sooner.

6.      Overlook implementation. Because implementation comes at the end of solution delivery, it is the last thing you might think about. Think again. The implementation phase can make or break the value of your solution. Make sure your TEM provider has a documented, detailed implementation process, with clearly defined milestones and a means to measure progress. It should accommodate your input and feedback as well, to support a collaborative approach to resolving unforeseen issues and changes in requirements. Rapid ROI requires rapid implementation, and that requires strong project management and clear accountability. Don't settle for less.

7.      Fail to maximize process savings. One way that TEM generates savings is by obtaining credits from carriers for errors and overcharges. While these and other hard-dollar savings are an important part of the value of TEM, they are far from the only source of value. Many TEM solutions include process best practices and automated workflow capabilities that can dramatically improve productivity and lower the cost of operations- generating a windfall in soft dollar savings. Because these dollars can be more difficult to measure, some companies fail to implement the policies and process automation that can maximize these savings. In fact, process improvements (and the soft dollar savings they generate) can provide a significant and ongoing return on the TEM investment, possibly even eclipsing hard dollars in total value. The savings that can be derived from the disciplined management of contracts and carrier negotiations, ordering & provisioning, MACDs, and wireless usage policy (to name a few) should not be underestimated.

8.      Fail to deploy wireless management. Wireless cannot be effectively managed through methods developed for wireline networks and services. The variety of wireless plans and providers, decentralized ordering and provisioning, cost of internet and data services, the inability to use conventional call accounting methods to gain visibility and accountability - these factors can quickly send wireless costs out of control. Case in point: a Fortune 500 company with over 20.000 cellular accounts found, during a TEM audit, that 4000 of these numbers were either no longer being used or were no longer in the hands of employees. Terminating these accounts saved over a million dollars. A wireless optimization program implemented as part of a broader TEM solution provides ongoing control and savings. Wireless management, including invoice, usage, inventory, invoice, ordering and provisioning management should be part of your TEM solution - or you are leaving untold dollars on the table.

9.      Lack of wireless policy enforcement. As a communications technology, wireless provides greater freedom than wireline, as well as the potential for greater abuse. The establishment and enforcement of policies for wireless usage, ordering, and provisioning are an essential part of a successful TEM solution. Despite your best efforts, automated MACD workflows can be circumvented, smart-phone users can access the internet and download applications and data - the expense management system can break down unless users understand the rules and the consequences of breaking them. Enforcement also requires usage monitoring, which today relies heavily on invoice analysis, although new technologies for "wireless call accounting" are in the works. In the meantime, make sure your TEM solution includes wireless policies that are clear and comprehensive.

10. Self-defeating dispute management. An effective invoice validation process will yield a continuous stream of disputable charges. This information must be handled correctly to deliver maximum value. Short pay and no pay policies might seem to make sense - when you are certain that the charges are wrong. However, until the carrier agrees, these "unilateral" strategies may end up costing you more in time and trouble than they save. Carriers may add late fees on top of the charges and then, whatever the outcome of the dispute, you have made more work for yourself. A more effective approach is to pay charges on time - while simultaneously working to acquire credits for disputed charges. This avoids late fees regardless of the outcome of the disputes, and allows your team to process invoices without contingencies that can create processing bottlenecks.

11. Fail to adequately train staff. Even the best solution will fail to yield the results you want if your staff does not know how to use it. Make sure all the right people get the training they need to use the system productively in their daily operations. Designate super-users on your staff and see that they receive an extra measure of training, so they can assist others as necessary. Your TEM provider might insist on more training than you think you need, because they know from experience how critical it is to the success of the solution. Trust their judgment - don't skimp on training. 

A TEM solution can deliver great value if you avoid these common mistakes. In fact, industry research and case studies have shown that it can generate ROI of 2:1 and be an entirely self-funding solution.

If you are tired of spending too much on telecom, TEM may be just what the doctor ordered. Make no mistake about it!

For more information on saving money with TEM, email Veramark at info@veramark.com.