Telecom Expense Management

Four Ways Telecom Expense Management Can Sharpen Your Competitive Edge

Telecom is a top expense for most organizations these days, and managing that expense is a challenge that requires the right tools and techniques. The first step is gaining visibility, because you can’t manage what you can’t see. Do you know what your telecom resources are? What they are costing you? Who is using them? How wireless usage aligns with plans? A telecom expense management (TEM) solution can help you gain visibility and reduce expenses. Key elements of TEM include:

• Assessment – An initial evaluation will verify your telecom inventory, review your contracts and invoices, and identify opportunities for immediate cost recovery and ongoing process improvements.
• Invoice management – A TEM solution can slash labor costs by automating invoice loading, validation, and processing. Questionable charges are flagged for investigation. Disputes are tracked and managed to maximize the recovery of all credits you are owed.
• Workflow automation – TEM software can streamline moves, adds, changes, and disconnects (MACD), ordering and provisioning, dispute management, and more. Web-based catalogs and help desk systems offer “self-service” solutions to end users and reduce demands on IT.
• Contract management – Contract management and negotiation offer huge opportunities for service plan optimization, SLA tracking and enforcement, order-to-contract compliance, and invoice-to-contract validation. Contract and vendor performance management can help you make informed, strategic decisions that offer long term savings and competitive advantage.

Telecom is more costly and complex than ever. TEM solutions have evolved to meet the challenge and provide the visibility and control you need to reduce telecom spend and improve the bottom line.

 

 

 

How to Keep Telecom Expense Management Off the Chopping Block

Does your company have an effective Telecom Expense Management (TEM) program in place? Are you concerned that your TEM program may not survive the next round of cost-cutting? In "The Value of Maintaining TEM," a recent study by AOTMP, researchers put these and other questions to over 100 enterprise professionals across a wide range of industries. While 71% of the respondents felt confident that their TEM program would not be a candidate for elimination, 29% expressed concern or uncertainty about the future of their program. New TEM programs and those that have been in place for 1 to 2 years seem to be on the most shaky ground. In this post, we'll review the 2 activities that AOTMP recommends to ensure that an effective TEM program survives future budget cutbacks.

Demonstrate Hard and Soft Dollar Savings
According to AOTMP, "an enterprise can expect, on average, annual hard dollar audit savings of 3% of their total telecom spend through the implementation of TEM." Although 3% might not sound like an overwhelming amount to senior executives, it is significant – especially when you can show that hard dollar savings are just the tip of the TEM savings iceberg.

It is when TEM's hard dollar audit savings are combined with other soft dollar savings – resulting from efficiencies such as improved productivity and cost avoidance – that the overall strategic value of TEM becomes apparent. Consider how TEM makes your employees more productive by automating many time-consuming processes and procedures. For example, look into the time saved and accuracy gained if your company processes MACDs through an online portal instead of handling them individually over the phone. Another component of soft dollar savings is cost avoidance. For example, if your company has implemented automated invoice processing, you can add up the previously-accrued late payment charges that you no longer have to pay.

Provide Visibility
Assuming that your TEM program is yielding both hard and soft dollar savings, the next step is to make sure that senior executives view the program as a profit center rather than a cost center. Being able to convey the overall program value to senior management on a regular basis is critical to sustainability. Yet, AOTMP’s research showed that 25% of those surveyed had no senior-level reporting or didn’t know what data was being provided. So make sure you are building visibility and credibility for your TEM program by providing a variety of regular reports to key executives. The metrics you provide will depend on your organization's objectives, but could include data on financial returns vs. cost avoidance savings, reductions in general ledger expenses, help desk performance, and other relevant measurements.

Your company's TEM program provides significant ongoing value, and deserves to be exempt from any cost-cutting initiative. The trick is to make sure your senior executives and financial stakeholders are frequently reminded of the combined hard and soft dollar savings generated by Telecom Expense Management.

Read the entire AOTMP Research Report >

Veramark Technologies, Inc. is a leader provider of Telecom Expense Management Solutions.

 

 

 

Telecom Expense Management: Looking Ahead by Looking Behind

Everyone wants to know the future, and sometimes we can predict the future by looking at our past behavior. In the Telecom Expense Management world, projecting the future is particularly interesting when we are examining actual expenses against budgeted expenses; and, when we are projecting whether we may meet contractual commitments for purchases.

  

 Many organizations will employ a simple approach for projection. In this post I’ll review three different approaches, each resulting in a different projection from the same set of data. Let’s use the following data to represent organization expenses for the last three months of the calendar year:

  

October: $5,000

November: $6,000

December: $7,000

  

Expense Averaging

The most common method for projecting expenses forward is to use the average of recent expenses. This may in fact be a sound approach if the expenses tend not to fluctuate much from one month to the next. Using the averaging method with our sample data, we can project that January expenses will be $6,000.

  

 Linear Projection

Another method for projecting expenses (favored by sophisticated spreadsheet users!) is to use a linear projection model. If we apply a linear projection model to our sample data, January expenses should be in the area of $8,000.

 

Seasonal Adjustment

Perhaps we happen to know that the business in question tends to peak at the end of the year, and there is a natural drop-off in activities (and corresponding expenses) once the New Year comes around.  If this were the case, we would want to use a “seasonally-adjusted” regression model for our expense forecasting, and January expenses would drop to $4,000.

 

So which is the most accurate expense projection: $6,000, $8,000, or $4,000? The trick becomes one of ascertaining which model best approximates the organization under review.  The answer will vary from organization to organization, and is best answered statistically when there is enough history for us to detect a pattern of consumption.

 

Here at Veramark, we suggest using several different models when forecasting expenses, and seeing which one proves to be the most accurate over time.  The closer we can come to forecasting actual expenses, the more informed recommendations we can make concerning how our customers’ precious dollars should be spent.

 

By Mike Miller, Veramark’s Director of Data Architecture and Analytics