Four different approaches to Telecom Expense Management

telecom expense management methods come in different styles

With Australia spending around $25 billion on communications per year (and growing each year!), companies are looking for ways to better manage telecommunication costs across the business. This is putting a lot of pressure on finance and internal teams to not only track telecom-related expenses but also achieve ongoing cost savings and process improvements. 

To help deal with the complexities of telecommunications across voice, data and mobile services – businesses are turning to third-party telecom expense management (TEM) companies. These providers can offer the necessary expertise, experience and resources to manage and track all telecom costs. They can also help optimise assets and services to deliver ongoing savings and process efficiencies. 

But not all TEM solutions are the same, so how can you determine which is the best one for your organisation? In this post, we will discuss the different approaches to telecom expense management and the kinds of businesses best suited for each solution.  

1. In-house solution 

Building your own internal team or approach is what many organisations do to manage telecom expense. Typically, members of your finance, IT, and procurement departments will form part of this ‘team’ and will use spreadsheets and emails to track invoices, services and suppliers. This is relatively easy to set up and since you are running everything in-house, most of the costs are absorbed by the current headcount. 

However, most often an in-house approach fails to provide complete visibility on all your telecom costs. Most of the time, it doesn’t go beyond the expenses detailed in your fixed and mobile bill. So, the actual costs of managing telecom assets (like procurement expenses, time spent managing mobile fleets and manual bill analysis) remain hidden and unreported. Relying on individuals to manage TEM as part of their job, with no strong support systems, can lead to a large hidden cost within an organisation. 

Other disadvantages of an internal approach include: 

  • Disparate systems and broken workflows 
  • Process knowledge and IP are retained in individuals, not with the business 
  • Reviews become infrequent as this is only part of people’s jobs and is becoming increasingly complex and time-consuming to manage as telecom expenses grow. 

An in-house approach may suit a small business with minimal telecom requirements, but for a larger organisation with multiple assets and services, a more robust and structured solution is required to deal with the complex environment.  

2. Outsourced Telecom Expense Management (TEM) provider 

An outsourced TEM solution can work well for large companies with complicated telecom operations. A team of external specialists can be brought in to handle billing, monitor expenses and track multiple assets and often bring with them the right resources, tools, expertise and focus for proactive management.  

Since TEM providers are experts in the field, they can easily review telecom invoices, identify billing errors, and recommend service improvements to deliver cost savings. Plus, with their strong relationships with carriers, these providers can help negotiate a better deal when your telecom contract is up for renewal. 

However, the outsourced service solution focuses mainly on the expenses – that is, the external carrier costs, and rarely get involved with internal governance, workflow improvements or strategic planning within an organisation.  As a result, often the kinds of billing inefficiencies and errors are immaterial and irrelevant to the larger agenda of an organisation. Further to this, while an outsourced solution may replace some of the internal workload, the data learnings and improvements generated over time are lost to the organisation once the service has been discontinued.   

3. Traditional TEM platform 

The ‘traditional’ TEM platform – that is, TEM platforms that have been around since TEM was digitised, offer similar benefits to an outsourced solution. This includes billing management tools that capture billing information, automate billing tasks, workflows and processing. This kind of solution provides visibility across carrier costs, invoicing and bill payments. It helps analyse bills and usage levels and delivers standard reporting on telecom costs.  

As a result, it is best-suited to companies that focus on tracking and reporting on telecom expenses across the organisation.  

Although the more traditional TEM platform is a good monitoring tool, it revolves solely around the telecom or mobile bill. Thus, it can only help to manage the external expenses in retrospect, and fails to provide complete visibility across the asset or service lifecycle for optimisation and planning purposes.  

Business looking for more than just bill tracking and reporting will be disappointed with the TEM platform approach and require a more holistic approach to managing expenses. 

4. The new TEM + lifecycle management platform

The TEM platform that is coupled with a lifecycle management capability goes far beyond the bill to drive process efficiency, optimise asset performance and improve governance across the whole telecom environment. This approach works well for organisations that have a medium or large mobile fleet and needs to improve internal productivity and governance around managing it. 

Platforms like Bluewater provide both TEM and lifecycle management that manages the entire journey from procurement to payment of telecom assets and services. It delivers a more holistic tool to streamline processes, analyse financial data and manage assets throughout their lifecycle – all within one central location.  

For example, J.J. Richards & Sons Pty Ltd, a waste management solutions business, optimised their mobile fleet and continue to reap significant cost savings to achieve 3x ROI on the mobility management platform.  

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