Companies worldwide are turning to total telecom cost management (TTCM) to manage all areas of communications expenses, rather than one a specific area. According to Aberdeen (News - Alert) Group’s The TTCM Solution Selection Report, telecom cost management vendors are able to provide services and technology that allow enterprises to save money and secure rapid return on investment (ROI).

 

 

The report indicated that companies have begun to see TTCM solutions as a top priority to address the pressures they face. The decision to implement TTCM is driven in part by strong market pressures faced by accounts payable departments. Aberdeen’s The Wireless Costs and Performance Benchmark Report also indicated that that wireless expenses have become a flash point for many enterprises. The majority (seventy five percent as of March, 2006) of the respondents said that wireless costs are becoming a much larger percentage of telecom spend.

 

 

Aberdeen Group said that, although wireless is attracting a large number of enterprises, it will be beneficial for the companies to have one department that develops an integrated approach to manage the lifecycle for both wireless and wireline services. The research group cited the example of companies such as Verizon, AT&T (News - Alert) and Sprint, which are making efforts to integrate phone calls, voicemail, and calendar functionality for both wireline and wireless phones, along with laptop computers and PDAs. Due to this effort, more users will be able to easily link all their devices under one common number.

 

 

Most of the companies begin with invoice processing, auditing, payment and asset management. Aberdeen predicted that the adoption of electronic contract management and e-procurement will grow as a large number of survey respondents showed interest in using these systems.

 

 

Aberdeen Group categorized the TTCM solution providers into the following division: Business Process Outsourcing (BPO); Licensed Software; “Software as a Service” (SaaS (News - Alert)), ASP, and On Demand. These categories are defined below.

 

BPO — Vendors can manage the entire program with the BPO approach. While the customers approve invoices for payment, the outsourcer may even agree to pay the invoices on behalf of the customer.

 

Licensed Software — Enterprises can host the software and maintain all data behind the corporate firewall. This approach is favored by enterprises that want to manage the entire program.

 

“Software as a Service” (SaaS), ASP, and On Demand — By hosting the software, enterprises can save hardware and IT management costs. In few cases the TTCM vendors load all of the billing into the system. In contrast, other providers simply load electronic billing media and leave entry of invoices received in paper format to the customer. Although the client is responsible for expense allocation, and dispute management, a large number of vendors will agree to manage these functions.

 

 

Through TTCM, a company can successfully manage the complete lifecycle for telecom expenses right from sourcing, procurement, invoice management, expense validation, internal expense allocation chargeback, inventory and asset tracking, payment, to reporting. It is important for organizations to see if they have to address all of these functions. Next the enterprise needs to determine the preferred method of delivery for the solution. The field of vendors can be narrowed down by the delivery approach.  At the same time, a framework can be developed for evaluating functionality as well as determining the kinds of questions that have to be asked of each potential vendor.

 

 

According to Aberdeen Group, the organizations should document in detail the scope of work and services that will be performed. In the survey most enterprises said that they manage less than sixty seven percent of their telecom expenses. Enterprises do not have an accurate inventory as nearly one third of the expenses are not being managed. The organizations searching for a TTCM solution must establish the scope of work, key assumptions, and pick a pricing approach that all vendors adhere to when pricing the program. By doing so, they will equip the evaluation team to compare and control the impact of incomplete data on the fees paid.

 

 

Traditionally, the sales proposition centered on the solution’s ability to reduce telecom expenses. Vendors often sold the TTCM solutions with guarantees that the cost of the program would eventually be paid through audit findings, optimization, and sourcing. According to Aberdeen Group, it is difficult to enforce savings guarantees that focus solely on telecom expenses. Instead, the savings guarantees should match the services that go beyond auditing of phone bills. The research firm emphasized that companies must create service level agreements, score cards and reports. All these will provide visibility into the health of the program. The SLA should measure performance for the timeliness of delivery, quality of information and program management.

 

To learn more about the concepts discussed in this article, please visit the Telecom Cost Management channel on TMCnet.com, brought to you by MDSL (News - Alert).