The Ultimate Guide to Telecom Expense Management: Putting your assets to work

What is Telecom Expense Management and why is it so important?

What is Telecom Expense Management?

Telecom Expense Management (TEM) is the way in which companies manage and track their voice, data, and wireless assets and services. It is an essential expense management and governance process covering all telecoms carriage costs, but also a company’s telecom assets (including mobile phones, tablets, GPS, IoT devices, and more) for individual and team usage.

To stay on top of their TEM, organisations can manage it with spreadsheets and manual analysis and processes, use a platform like Bluewater, or engage a services firm to totally outsource TEM.

In general, TEM includes the following:

  •  Building a visible and real-time inventory of assets
  •  Gathering, analysing, and reporting on bills
  •  Looking at contracts and ensuring compliance
  •  Optimising the telecoms environment to improve productivity while reducing spend (including supporting every asset user in the organisation)
  •  Negotiating with vendors to get a good deal

Why is Telecom Expense Management important to understand?

Before mobility, PABX (Private Automated Branch Exchange – aka, the telephone switch) was a relatively stagnant asset in the enterprise. Phone lines and associated assets were fixed (nobody ever took a desk phone on holidays), bundles and invoicing were simple, and the whole telecoms capability was relatively easy to manage.

The exponential growth of mobility has since transformed the telecom expense management function. Now, unprecedented complexity and large amounts of work characterise TEM. As organisational fleets and expenses continue to grow, purchase decisions become decentralised and both IT and Finance get limited oversight over the whole lifecycle of assets and their services – from procurement to provision through varied usage and finally, to retirement. Meanwhile, internal documentation about contracts, service orders, changes and moves, bill validation and reporting becomes increasingly fragmented and distributed. In simple terms, this translates into the following challenges:

  •  What is ordered is difficult to verify at the billing stage
  •  Allocation of appropriate expenses to appropriate cost centres in retrospect is laborious and error-prone
  •  There is no single view of the whole lifecycle of assets for finance, IT or the business stakeholders who require it, preventing proper governance and control over investment and spend.

It is easy, then, to see why organisations can free up to 25% or more on telecom expenses, that can then be better utilised in a growing telecom and IT ecosystem.

Furthermore, as companies are spending increasingly more on telecoms-related expenses, the organisational expectation is that IT and Finance will provide enterprise mobile solutions that deliver optimum efficiency and productivity for mobile users, while not overcomplicating their environment.

The expectation is really no surprise. However, in an age where mobility solutions can be a driver for productivity, efficiency, and ultimately competitive advantage, the very decision-makers who need visibility over pertinent data to drive this forward are left in the dark.

The problem with thinking TEM is reviewing your mobile and telecom business plan every two years

Your two-year review of the Telecom Business Plan – and what it achieves

Negotiating to get the best deal from your carrier often hinges on the biennial review of the carrier’s plans – for many Australian companies this means reviewing their Telecom business plans and other telecom spend on a periodic cycle. In a bid to optimise spend, organisational decision-makers will ask the carrier’s Account Executive to repitch for the contract. Often, other carriers will also be invited to pitch as well, for commercial comparison.

Naturally, a carrier will look at usage, plans and needs for the coming two years, and will present the best possible solution to retain and re-sign the customer. This generally results in an optimised spend and access to services that are fit for the organisation’s purpose in the coming period.

This is a cyclical task, and one that most organisations undertake whether they perform other TEM activities or not. However, according to Gartner, carrier costs only make up around 50% of the total cost of ownership. Further optimisation opportunities can be completely missed during the cycle if the renewal is the single focus.

What a biennial review of Telecom Mobile Business Plans does not achieve

The review of your carrier’s plans every couple of years does not capture the changes and movements within your organisation throughout the contract period. Organisations move and change too fast these days, and the concept of optimisation reviews every few years is one of the past. Just take a moment to think back two years – where were you, what job were you doing, what equipment were you using, and where did you sit? Did you work one day per week from home then? What about now? Were you on 4G back then? The point is, so much can change in a two-year period – for one person and for an organisation of 100, 500 or 1000 people.

Secondly, a review every two years does not help to ID under or over-utilised assets in the organisation on a regular basis, for example. While you’re highly likely to get a better-value deal on the services your organisation consumes, what of the 1000 iPhones your organisation purchased last year? Where are they? What services are they running? Who is using them and how? Are we getting the performance out of them that we expected? Where is that measured?

Looking beyond the biennial review: managing telecom expenses with manual processes and spreadsheets

Luckily, not all organisations rely on the carrier review as the only TEM process. Many others adopt a continual review throughout the contract period, by watching out for anomalies and variances in billing against budgets or previous statements. This management by exception helps to improve processes and limit overspend that can’t be done with a renewal review alone. Unfortunately, the overspend has already happened, and that overspend or mistake therefore needs to be covered by tightening wallets elsewhere, which often comes at an opportunity cost to a competing business.

And then come the spreadsheets. Many organisations will do a telecom expense audit to track their services in operation and try to build a register and inventory of assets in Excel. This helps to identify which assets belong to which user, match the user and asset with the appropriate service and facilitates a multitude of other laborious but necessary support tasks.

Each of these management processes builds on the other to improve the visibility and control over mobility costs that extends beyond the renewal, however, with so many moving parts, it can be nearly impossible to continually update and manage changes and movements via email, check contracts, allocate costs correctly, manage requests, downtime issues and other support issues internally. This is the hidden cost of TEM – the cost of managing your fleet, and it can cost as much as your telecom expenses themselves.

A service-based approach to TEM

As a result, many organisations started to outsource their Telecom Expense Management to service providers, preventing distractions and long, drawn out investigations to stay focused on core competencies.

Such outsourced providers help organisations get on top of their expense management by performing tasks relating to reviewing bills and monitoring expenditure. Each month manual reports are generated with commentary and sent to the key stakeholders for telecom expense.

Such service organisations have been around for at least 20 years and are still going strong today. While a good choice for many organisations, many of these managed service TEM offerings are purely analysis and reporting solutions. They are not helping organisations deliver the operational improvements that Gartner refers to as hidden cost in managing mobility and TEM.

In addition, a service organisation will use its own systems or the carrier’s billing tool. If you ever decide to stop working with the service partner, the billing information stays between you and the carrier, but you can lose access to the important data that helps your organisation to make strong future decisions.

A platform-based approach to Telecom Expense Optimisation

Enter stage left the first of the TEM platforms.

Early platforms revolutionised the way many organisations manage telecom costs. Like most softwares that digitise manual tasks, the early TEM platforms helped keep all information centralised, accurate and organised, from inventory to services and billings. Many manual billing-related tasks and spreadsheets are automated, saving IT and finance time.

This more consistent, data-led and centralised approach to TEM can deliver greater utility and value to organisations, while strong management of assets can also ensure a higher return on investment and performance.

However, even this has its shortcomings. A TEM platform will ingest bills, ID anomalies, and help optimise telecom spend against previous bills or budgets. What it won’t do is consider the procurement tasks and contexts in the billing management.

Let’s say that you get a new staff member in your sales team, based in the South Australian office. The manager needs her set up fast, so he grabs a SIM that’s in his desk and runs down to JB HiFi to get a new iPhone, as the old phone in the desk will be, uncharged with who knows what apps installed and OS running.

The salesperson hits the ground running and is on the road hot-spotting to her phone to get her work done.

The invoice arrives in finance, and there is a large excess data charge as the SIM was actually for a low-use admin role. The finance manager now needs to find out who has the SIM. Emails fly around the business to managers and the IT department, and after a month the manager responds (let’s be honest, with the pressures today in the workforce, investigating emails from the finance person around a phone cost are not the highest priority!) By this point, another month of excess charges has occurred.

The finance manager now attributes the phone to the department and informs the IT manager. The IT manager procures a new SIM on the appropriate plan and enquires about what hardware is being used and how it was procured. He shows something close to pained incredulity at the fact that the phone was purchased at a high-street store and not off the asset register, much less the inventory of new iPhones that are in the IT storeroom.

IT and finance need to now update registers and reports for monthly governance. A few months later the salesperson leaves and the phone and SIM are back in the manager’s draw. Neither IT nor Finance are aware the person has left, and so no cancellation of the service has been performed.

Now multiply this small workflow to 1000 users, and imagine the chaos that ensues. Also think about how any change to an existing service or asset is managed in your organisation. How much time is spent (read: wasted) and do you really have clear visibility at any point in time?

Analysing ongoing spend, and controlling it, requires knowledge of the initial procurement environment. Knowing why, when, and who of a purchase helps to manage the admin and labour and optimise the telecoms environment for organisations. While automated bill analysis is helpful and relieves an organisation of many administrative hours, it still misses the bigger picture of telecoms investment.

A new generation of Telecom Expense Management

Telecom Expense Management has come such a long way in the past twenty years. And it is clear there are two sides of the telecom expense coin:

  •  Telecom carrier expense: The costs related to purchasing the assets and services from your carrier
  •  Telecom management expense: The costs associated with managing those services, assets and users internally – tracking assets, supporting users, allocating costs, providing optimum productivity and efficiency to your users etc…

Most TEM platforms have focused on optimising the telecom carrier expense. This makes it really a telecom billing tool.

The new generation of TEM platform however, manages both sides of this TEM coin. Designed to help manage vendor costs, the new model is also designed to streamline all internal workflows associated with managing the telecom investment. From digitising manual internal workflows, interactions with service partners, to allocating activity to individuals and cost centres, the new generation of platform ticks off the tasks that would otherwise cause problems down the line. You could call it a Telecom Lifecycle Management Platform, if it wasn’t such a mouthful. Let’s call it a ‘TLM’ platform for short.

Instead of outsourcing the data management and admin, a TLM platform is built around an organisation to provide better efficiency and better information, that improves visibility and control over all aspects relating to TEM. This prevents an organisation from having to outsource the data management and admin. An organisation can be therefore empowered to make the right decisions, while not being overrun with the administrative burden.

The key difference in next-gen TEM or TLM platform

Firstly, and most importantly, a modern-day TLM considers the procurement context of telecom management. Essentially, the procurement cycle impacts everything that comes next, so preparing an organisation from the earliest stages is key to minimising the tracking and measuring later on. This includes:

  •  Capturing approved assets and services in a catalogue to make purchase decisions effortless for procurement
  •  Ordering via an approved catalogue and sending policy-aligned requests to fulfilment partners (no more ugly heaters!)
  •  Linking assets, employees and cost-centres from the very beginning – reducing allocation headaches later on
  •  Predefining order bundles for different role types – simplifying procurement further
  •  Tracking requests and fulfilments in one simple location (instead of an addled multitude of email threads)

It is easy to see how the majority of issues that arise from poorly (or even moderately) managed TEM could be solved for at procurement stage with the proper tools and organisation.

However, even with procurement tools included in a robust TLM platform, expense management is not something an organisation can manage in isolation. Close collaboration with carriers and other vendor partners is key to successful optimisation, which is why today’s TLM platform becomes the hub for all communications as well.

Using one single platform as the centralised hub simplifies things for the organisational manager by bringing together:

  • Departments like IT, HR and Finance
  • Managed service providers (if relevant)
  • The Telco carrier
  • Information from 3rd party platforms (e.g. MDM, IoT)

One destination from where to manage all stakeholders is a dream for both finance and IT. It also helps
to:

These key functions, on top of the ability to see, and control costs, integrate with MDM platforms or suppliers and get valuable data from the whole environment in manageable dashboards makes a TLM platform a godsend for all organisations with even slightly complex telecom environments.

Why and how organisations are adopting the next gen of TEM

Most now understand the value of data visibility inside an organisation. Fragmented processes that are time-consuming, manual and difficult to manage are the very antithesis of digital transformation – the cornerstone of survival and growth in today’s environment. Priorities we’re typically seeing from finance and IT include:

  •  Simplifying the mobile fleet management
  •  Improving visibility of assets, expenses and usage
  •  Getting control over the procurement process in order to be able to manage the rest of the mobility lifecycle.

The ACH Group was one such organisation. With Bluewater Control, ACH implemented a telecom expense management solution that achieved operational efficiencies, savings and better governance to empower decision-making. The firm also achieved a 2x estimated ROI on the platform.

The Royal Flying Doctor Service (RFDS) had similarly become hamstrung by unwieldy, manual processes in service and asset allocation. With a cumbersome Excel-based process, RFDS struggled to gain control over their bill, get visibility over assets, and took days of work time to even understand the variances. Now, the RFDS has a single platform to oversee and administer from, all the way from procurement asset and service management. Already boasting a 2x customer-estimated ROI, the organisation can now capture asset details at procurement and termination, access billing information in one place, identify redundant services, quickly stop and start services when required and has completely streamlined their telecom expense management.

Why Telecom Expense Management needs to be addressed today

The growth of the mobile workforce

Expenses relating to voice, data and information services are a large and growing expense for many organisations. Mobility is a growing necessity, with staff provision of mobile devices and cutting edge services perceived by most organisational leaders to provide collaborative, always-on behaviours that deliver competitive performance.

5G’s arrival and impact

While 5G is slowly rolling-out across Australia, it is here, and with it, the Internet of Things (IoT) will really gather momentum. 5G networks will deliver faster speeds and better reliability, as well as increased capacity – in fact, up to 100x current thresholds. Industries such as the emergency services, transport and mining will benefit from enhanced connectivity that will, in turn, support their work in the field. However, as with every technology innovation, it will also bring challenges to manage.

Mobile services will exponentially diversify as 5G drives greater sophistication, more devices, new activity. Proactive management from procurement and throughout the lifecycle will, in turn, become more complex to track and manage. Excel spreadsheets and manual processes that currently glue disparate systems together will shortly come under even greater strain, and organisational leaders will call for better efficiency, optimisation and governance.

5G is not the only huge change that is coming down the line. Telecommunications is a rapidly changing industry, and quite significant impact is expected on asset lines and services. A platform that can manage administration and collaboration efforts will help organisations manage telecoms effectively and keep their focus on the end game. But organisations shouldn’t wait until 5G is here. Now is the time to get houses in order.

The ROI on TLM platform investment ​

The simple steps toward implementing your new approach

Bluewater Control has a fully-supported implementation that helps organisations to set up the platform. It includes mapping out the following:

  •  Access to billing data
  •  Asset information
  •  Organisational structures
  •  Cost allocation details

Yes, it involves a little work to begin with, we’ll walk you through it the whole way. With or without a platform, and with or without help, organisations need to map these items anyway.

The time to value equation

With Bluewater Control, improved visibility and the sense of control is with you within weeks of the creation of your cloud platform with billing data coming within a fortnight, and just a month or two to see the full picture. This is even with very large fleets and very low visibility to begin with.

The ROI results you can expect

As a productivity tool, Bluewater’s sole purpose is to drive efficiency, visibility and control into the
management of mobility and telecom expense. In doing so, Bluewater needs to deliver a net return to
an organisation.

Bluewater Control is typically seeing around 2x to 3x return on the platform investment. This is without fully counting the true hidden costs inside an organisation that are not accurately measured. (People will never admit it took them three days to do a manual reconciliation, for example). The Bluewater Control case studies tell you what you need to know.

Return on Investment estimates are modelled for clients to demonstrate potential savings based on
an aggregate of existing Bluewater customers of similar fleet sizes and spend. Check out our benefits page here for more information.

To recap, your options to compare are:

  • Manual processes and spreadsheets
  • Outsourcing to a telecom expense service provider
  • Getting a traditional TEM or billing platform
  • Bringing in a new platform that provides you with the data and control, with or without some managed services.

How to gain support and get budget for your initiative

If you have:

  • Significant telecom spend
  • Over 250 mobile services (the bigger the fleet the greater the complexity)
  • A lot of manual work to manage the spend and the fleet
  • Some uncertainty as to whether all assets and spend are optimised
  • Difficulties in efficiently ensuring accountability and governance against users and cost centres

If yes to multiple items above, then you don’t just need a platform, you need the latest evolution of a TEM platform; a telecom lifecycle management (TLM) platform. The Bluewater platform can integrate with any current managed service provider assisting you with your Telecom carrier fleet. Bluewater is also offered by many Telecom carrier’s leading managed services providers as an integrated part of their service stack.

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