Telecom Expense Management: The Ultimate Guide

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telecom expense management What Is Telecom Expense Management?

Communication is the lifeblood of business. Whether it’s business to client, business to vendor, or coworker to coworker, communication runs in all directions, and is crucial for the success of a business. Telecom is a vital mode of communication. All companies employ telecom services to meet their communication needs, and telecom services can be a sizable expense.

For large companies, telecom contracts, pricing and billing can be very complicated. Telecom expense management, or TEM, attempts to simplify the complexities, solving any mysteries associated with telecom expenses. The goal of TEM is to insure that a business is only paying for what it needs, and is getting the best prices available. For most large companies, telecom expense management is a necessary part of running the business. Here are some options to consider when choosing a TEM system:

DIY Telecom Expense Management

For nearly every business decision, cost is one of the deciding factors. As businesses make decisions regarding telecom services and service providers, the decision makers look for the best service for the lowest cost. When choosing to manage the telecom expenses internally, DIY style, this is often viewed as a money saving option. And initially, it probably is.

Avoiding a software purchase or avoiding payment for an external audit means that money stays within the company. But think for a minute about the DIY projects that you have attempted yourself around your house…some minor plumbing, wiring, woodworking… They make it look easy on t.v. But how many of these DIY projects have you started in an effort to save money, and then paid a professional to finish the project and bail you out? DIY telecom expense management often yields similar results. Unmanaged, companies tend to pay for services that they don’t use, or even services that they don’t have. DIYers who don’t know the business like the professionals will be at the mercy of whatever pricing your provider sets for you.

Some companies give the task of telecom expense management to an employee or team of employees. However, it takes time to develop expertise in this area, and then more time to manage the expenses.   Companies that choose to manage their telecom expenses in house are paying employees to learn the ins and outs of TEM, rather than doing something else that could provide value to the business. For larger companies, DIY telecom expense management can be the more expensive choice in the long run.

TEM Software

Of over 5 trillion dollars that has been spent globally on telecom expenditures, almost 2 billion of that was spent on purchasing telecom expense management software. TEM software, though an upfront expense to purchase, can be a long term cost saver for many businesses. Utilizing TEM software allows companies to process and organize the large amounts of data created by their telecom billing system. This can be a valuable tool for businesses as new contracts are signed, vendors are changed, locations are opened or closed, or services are added, discontinued or altered.

Reviewing the organized data provided by TEM software can benefit companies in many ways, such as identifying where money is being spent and saved, identifying and eliminating fraudulent or unauthorized charges, and recognizing and correcting billing errors. TEM software can also be set up to monitor contract expiration dates so that they don’t renew automatically. That way discounts can be renegotiated before they expire. Companies who benefit the most from TEM software are larger companies with many lines, circuits, users and locations. Typically, if your company spends several thousand dollars per month on telecom bills, then TEM software can be a beneficial option.

Is there a downside to TEM software? Only that in order for the software to be effective, there needs to be a qualified employee or team of employees inputing the information correctly.   The employees managing the TEM software also need a clear understanding of the monthly billing parameters, current billing rates, usage fees and overage fees in order to make informed decisions about telecom services. Your TEM software is only as good as the people managing it.

Telecom Expense Management: The Audit Process

Another option for telecom expense management is to have a manual audit performed. This requires an auditor, or team of auditors to do a thorough review of the telecom bills and contracts in order to locate errors and identify ways to reduce telecom cost.   Typically, an audit will take place every 12-18 months, often with a monthly review after the initial audit occurs. Businesses can expect a manual audit to be both meticulous and non-intrusive. Much of the auditing can happen offsite, so that business can carry on with business as usual.

What can a company expect from a manual telecom audit? An audit will inventory all lines, circuits, wireless devices and features throughout the business, and will review every line item on the telecom bill. This will identify any billing errors, unused or underused services that the company is paying for, and credits or refunds that are due from the service provider. The audit will also identify the assets of the telecom service contracts, so that the company can be sure to ask for them in future contracts. The goal of a manual audit is to help businesses gain an understanding of existing contracts and commitments in order to develop, implement and maintain a cost effective telecom contract strategy moving forward.

What kind of financial benefit can a company expect from a manual audit? When PAG performs an audit, their typical client recovers up to 2 months of expenses in refunds, and receives an overall reduction of 23% in telecom expenditures. This can be a tremendous cost saving benefit, and well worth the price of the audit.

Choosing The Right TEM Solution For Your Business

The first step in choosing a solution for your telecom needs, whether it is purchasing software, obtaining a manual audit, or appointing someone in house to manage your telecom expenses, is to understand your business. Decision makers need to answer questions such as “What are the current monthly telecom expenses for the company?” and “Is there an employee working for the company who understands TEM well enough to oversee the telecom expenses or manage software?” Understanding the current situation will help to determine the best TEM solution for the company.

It is important to understand that a manual audit, TEM software and internal telecom management choices do not have to be “all or nothing” options. These choices can be utilized in combination with each other to provide a company with a solution to meet its unique needs. Knowing the companies strengths and needs, and understanding your options when it comes to TEM will help your business find the right solution.

[author_bio username=”Ken”  name=”yes”]

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