Telecom Expense Management - Lost Money Found

Telecom Expense Management, like network security, is something that everybody agrees is important but only really adopts when Fate bonks a company over the head. In today's economy, organizations of all sorts have suddenly become aware that telecom costs are normally a top-five corporate expense. According to the Gartner Group, on average, 8 to 12 percent of telecom expenses are billed in error, which is quite amazing when one considers that the average Fortune 500 company spends over $100 million on telecom services annually. Help comes from today's TEM companies, which not only find and control erroneous billing generated by the carriers, but can now additionally manage voice, data and wireless expenses by tackling the thousands of monthly invoices that must be reconciled against contracts to ensure invoice accuracy and against the actual inventory of services used, all while many circuits and wireless devices are activated and deactivated every month. Such TEM solutions can be delivered as licensed software, as hosted SaaS (Software as a Service), or as a fully managed service.

Explosive Savings

TnT Expense Management, founded in 1999, is known for its proprietary management system, TeleBase. The TeleBase system conducts an audit comparing all charges against an organization's inventory; it also does comprehensive contract rate analysis, but the whole audit process does not rely completely on software automation. An experienced human analyst having analytical, organizational and "people" skills is always part of what TnT does for its clients in terms of uncovering significant credit opportunities and bringing about ongoing savings that can be multiples of the cost of TnT's services.

TnT Expense Management's software/human expert telecom audits are capable of evaluating your company's overall telecom network infrastructure and telecom billing records. The subsequent detailed analysis performed on your invoices results increased cost savings opportunities, which can derive from anything ranging from billing and circuit audits (which result in credits for overcharges) to negotiations with vendors, to moving your organization to alternate carriers or services. Obviously, savings vary dramatically depending on the telecom configuration, specific vendors involved and the total telecom spend. TnT Expense Management says that savings generally range from a low of 5 percent for local billing reviews, to as high as 35 percent for all long distance and data billing. Other variables that impact savings include vendor account teams, client auditing and date of the most recent contract negotiation. Moreover, the auditing process is an on-going phenomenon, thus ensuring accurate billing and the recognition and realization of refund opportunities.

Your company's "Telecom Inventory" is maintained and updated over time. First, however, TnT begins with a client-provided Inventory at implementation. Updates are made based on the following: invoice processing and reconciliation of Inventory; access to network order notifications (e.g. additions/ deletions/relocations of circuits and/or services); and the format of circuit numbers to ensure accurate matches against billing and trouble reporting purposes. Exception report items are then researched in detail and appropriate actions are taken. It may be that you're being billed for circuits that you had cancelled or had not yet installed, or your circuits were billed and installed, but aren't in your inventory.

Bigger can be Better

The biggest of the TEM companies, Tangoe, has a large collection of software and technology-enabled services that help organizations manage, understand, and control their fixed and mobile communications assets and costs. Tangoe uses the term "Telecommunications Lifecycle Management services and solutions" to encompass TEM, mobile device management, and the optimization of every critical process within a company's communications environment.

Tangoe's CommCare managed services suite enables various kinds of organization to completely outsource fixed and mobile communications management while gaining greater understanding and control of their enterprise-wide telecom resources. By addressing each unique process within the communications lifecycle holistically (not as individual point solutions), Tangoe provides clients with dramatic process improvements and cost reductions which significantly contribute to their organizational profitability.

Tangoe's CEO, Al Subbloie, says, "Lately we've all been reading about companies that haven't stayed in business, but the majority are going to keep operating, and they realize that bottom line management is probably their main task for the next 2 to 3 years. We've been able to take advantage of the situation via our M&A activity to achieve scale, marketing events and the capital we brought in long before the economic downturn."

"Our term Telecommunications Lifecycle Management has been getting some traction lately, though the original term 'TEM' is what many people are aware of," says Subbloie. "There's excitement around mobile devices and the concept of them being an asset, and then companies must deal with the fact that this asset typically 'turns over' more rapidly than things in the wireline world. The concept of 'lifecycle' tends to be seen in 'Mobile Device Management,' another term you hear about quite a bit. As I said, as soon as companies realize they're going to stay in business, they've got to save money. When I founded Tangoe, cost control was a hot item and it stayed that way."

Tangoe recently announced the availability of CommCareM Enterprise Mobility Management (EMM) Version 4.5, which includes new monitoring functionality for BlackBerry Enterprise Servers (BES), which means that smart device network environments can now also be subject to reduce costs, increased security, and improved stability. This new smart device monitoring technology provides a complete array of preventative, proactive, and reactive smartphone environment monitoring capabilities. By combining Mobile Device Management (MDM) and monitoring capabilities, enterprises can now seamlessly integrate device management requirements (data and device security, mobile application policies, and usage policies) with mobile environment management (network configuration, operation, and optimization).

A River of Savings

Rivermine's Telecom Expense Management Solutions consist of software and managed services that automate the process of negotiating telecom contracts, ordering telecom services, maintaining an accurate inventory and receiving, auditing, and paying bills. Rivermine eXPERTSolutions "bridges the gap" between traditional outsourcing and TEM software.

Rivermine's philosophy is that real savings come not from just a one-time financial audit, but from ongoing, automated, bill verification and maintaining an accurate inventory of a company's devices and services in use. Unless inventory is accurate, any financial analysis is suspect, and it becomes difficult to recover incorrect charges and negotiate the SLAs and contracts that are crucial to telecom expense management.

Rivermine says their software, SaaS, and managed services can bring about a 20 to 70 percent reduction in spend through telecom contract renegotiations a 10 to 40 percent ongoing reduction in overall telecom spend each year through automated bill auditing and inventory optimization, and a 50 percent reduction in the headcount required to process services orders and invoices.(You can receive invoices electronically via XML, EDI, website downloads, CD ROMs, and other standard formats
or enter invoices manually.) Rivermine even has a telecom contract negotiation service that leverages reverse auction capabilities and industry benchmark data, enabling you to secure the lowest rates possible.

Corralling Wireless Costs

Veramark Technologies offers TEM solutions for Sourcing Management, Ordering & Provisioning Management, Inventory Management, Invoice Management, Usage Management and Dispute Management. Their VeraSMART suite (Veramark's TEM-enabling technology) helps organizations gain visibility into their communications networks and reduce expenses associated with their voice, data, and wireless services and infrastructure. Veramark's solutions can be delivered as licensed software, as hosted SaaS, or as a fully-managed service.

Veramark has also boldly taken on the current hot area of comprehensive Wireless Management and ways of controlling wireless and network costs. Their optional Wireless Procurement solution leverages workflow automation through VeraSMART and the MySMART Web Portal (powered by VeraSMART) to help reduce wireless expenses across the enterprise. You can now reduce wireless costs, improve service plan and internal policy compliance, and at the end of the day enhance your ability to negotiate favorable vendor contracts. The pre-packaged Wireless Procurement workflow solution provides end-to-end process management through the MySMART portal.

Veramark's offers many other services for controlling wireless usage and spend, such as providing a historical review of your wireless communications services and expenses to identify opportunities for improvement and set benchmarks for measuring future savings; monthly audits of your wireless billing statements; summary and exception reports to identify errors and inaccuracies; wireless invoice management, to make sure that you get the full value and the appropriate discounts from your carrier contracts; consulting services to assist you in negotiating the best possible contract terms with each wireless carrier, domestic and international; network optimization, to ensure that your rate plans strike the right balance between cost and performance based on the way your organization uses wireless services; and help desk services to provide your end user community with advanced technical support for all devices deployed in your wireless program.

Richard Grigonis is Executive Editor of TMC's IP Communications Group.