The Ultimate Guide to Telecom Expense Management:
Putting your assets to work
Chapter 01What 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 (mobile phones, tablets etc…) for individual and team usage.
Organisations can manage their TEM 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:
Why is TEM 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:
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 expectations 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.
Chapter 02The 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 pasty. 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 3G 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? [Hit prediction: Jan from accounts took one home to work late one night about four months ago. It got stealthily requisitioned to the kids’ playroom for clandestine Fortnite battles. It is still there, but nobody knows – except for Jan’s kids.]
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, well, embarrassing.
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 1000 times users and complexity, 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.
Chapter 03A 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:
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 is the cycle that 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:
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:
One destination from where to manage all stakeholders is a dream for both finance and IT. It also helps
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:
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.
ISS also achieved an ROI on the Bluewater platform, this time estimated at 3.5x the cost of the platform. Previously using a Telecom carrier procurement module, ISS found that the separation of procurement from telecoms billing still required manual intervention that was laborious and repetitive. With Bluewater, ISS managed to streamline internal workflows and get higher visibility over services and assets, which achieved huge cost savings for them in the first year, and will continue beyond.
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.
Chapter 04Why 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.
The coming of 5G
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.
Chapter 05The 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:
Yes, it involves a little work to begin with, you can get a dedicated implementation manager to 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
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.
How to gain support and get budget for your initiative
Do you have a solid grasp of the activity and time invested to managing your telecoms investment? This is really the first step towards getting support to improve your approach. Hidden costs in mobility management include but are not limited to time to procure, staging and deployment time, expense management, support and cost allocation. Starting to understand this will lead you in the direction of the right solution for your business, and give you a solid case to share.
While reviewing the hidden costs of telecom expense management, it is also wise to check on your governance. Is every service being used as intended, and is a named person taking responsibility for each asset and its usage? Are you satisfied with the services and governance? If not, where would you like to see improvement? All C-Suites want to hear about return on investments in every part of the business, so governance and hidden costs provide a solid platform for business case creation.
To recap, your options to compare are:
How to gain support and get budget for your initiative
If you have:
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.