How to Create a Business Case for Telecom Expense Management

By Robert Halik, Veramark Senior Telecom Analyst

Your stakeholders will need to be convinced that bringing on a telecom expense management (TEM) services provider will materially reduce your expenses and increase operational control in a low-risk fashion. To make your pitch successful, you must make your point quickly and your message must resonate in a powerful way. Here are two key talking points:

Contingency Audits Provide High Upside with No Exposure
You can start out slowly by engaging a TEM provider in an audit project with contingency/success fee-based pricing. Fees are negotiable, but if you engage a provider to audit your organization's invoicing with no upfront costs and a 25% success fee, you are essentially getting free audit work at no risk. If your TEM services provider finds $200k in billing errors, then you cut a check for $50k after your audit savings are realized. If your provider does not find any billing errors, it costs your company nothing.

This is actually a good deal for your company and TEM providers. Why? Because service providers will most often find errors that justify their effort. This is especially true when considering their contingency audit opportunities in the aggregate. A TEM provider is also eager to perform excellent work on your behalf to initiate a long-term relationship, so that they can perform additional professional services for your organization.

This is typically the way enterprise companies like to dip their proverbial toe into TEM waters.  It’s safe and easy. It’s a TEM no-brainer.

Other TEM Services Provide Very High Upside with Limited Exposure
Other professional services such as Network Optimization Analysis or Contract Negotiation support can turn up tremendous savings opportunities while also limiting financial risk to your organization.

Optimization work, like audit analysis, is most often priced on a contingency basis. The only difference is that the potential for savings is often greater than for audit analysis alone. Skilled TEM analysts will always be able to find ways to save money via: (1) cheaper service alternatives; (2) transfer of non-discounted pricing for certain services to contracted rates; (3) longer service terms where appropriate; or (4) the removal of unnecessary services altogether.

Contract Negotiation Services ensure that your organization procures the right services, at the right costs, under the right contractual agreements. These professional services will often deliver the biggest TEM bang for your buck, and frequently include success fee caps and savings guarantees to assure the client that results will be equitable and fair for both parties. Here’s an example of savings guarantee language:

“ACE TEM guarantees the annualized savings resulting from the negotiated contracts will be more than X times ACE TEM’s fee.  If the first year savings is not at least X times ACE TEM’s fee, the fee will be reduced proportionally relative to the expected savings, with a minimum fee of $N.”

LEARN MORE – download our white paper: The Low-Risk Approach to Telecom Expense Management.

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DISCLAIMER: Veramark Technologies, Inc. does not guarantee the authenticity, accuracy, appropriateness, or security of any hyperlinks contained within this posting.

Comments

[Buy Apple iPhone 3GS]

I think, business Creation have to be More Strong As About the telecommunication!

[Johnelle]

Keep these articles cmiong as they've opened many new doors for me.

[telecom expense management]

Telecom Expense Management deals with collecting data about current telecom expenses and finding new methods of reducing these expenses. Telecom consultants use several methods to obtain data about the current telecom bills and see where most of the money is being spent.

[business consultant]

Creating a business case can help in a lot of ways, especially if it's for a telecoms expense management. With that business case, you'll know the risk factors and the things you should improve.

[philippine business registration]

Thank you for providing this telecom expense model. I can adapt these to settle my telecom related expense.