Common Pitfalls of TEM
Gartner Research states, “…at the heart of any TEM offering is an automated software platform used by the business or by an external service provider managing a company’s telecom invoices and assets…”
This telecom cost reduction service touts amazing savings by providing “real-time” up-to-date telecom pricing while noting any common overcharges. Many companies that operate under the “telecom consultant” moniker sell this type of value added product to other businesses and organizations who cannot effectively and efficiently manage their telecom costs. On the surface, TEM (Telecom Expense Management) does work to properly inventory and categorize different telecom products; i.e. LD, Data, Wireless devices…etc. Also, if the TEM carrier database is properly maintained, it can provide a relatively accurate pricing matrix for each applicable service. This, unfortunately, is where the benefits of a TEM software platform stop and headaches begin.
What is not obviously publicized is the large investment costs associated with using a software based telecom expense management system. The software itself can cost thousands of dollars for implementation and user licenses. Of course, you also have the telecom provider’s databases that need to be loaded and those can be an upfront or subscription based cost. Once these initial expenses have been settled then you need the time and dedicated resources to properly manage the telecom inventory, service/ pricing updates, financials, security and discrepancies. It is true that some TEM packages come with a project management team, who have little to no telecom experience, which focuses on data management but doesn’t audit for cost reduction.
In review, the company has spent thousands of dollars on a telecom expenses management system that has initially not saved the organization anything while also taking time away from employees who could be doing other productive activities. So where is the ROI? Most TEM providers will promote an 18-22% savings but those numbers can be misleading because no timetable is usually given and to hit that maximum savings potential the client would need to be fully engaged and up-to-date with all the software has to offer. Understandably, most IT Directors, CIO’s, CFO’s, or finance executives do not have the resources available to fully dedicate to managing a TEM platform. So what could be an alternative to using TEM software while generating cost reduction with those telecom services?
The answer lies in a more hands on approach. What if a third party firm, who has worked for the various telecom providers could offer a complete package of telecom cost reduction services that takes zero time away from client? This firm would categorize and inventory all telecommunication services, use network and market intelligence to update pricing models, implement cost savings and verify any credits or refunds due to the client. Also, these services would be performed on a monthly basis for at least 24 months. This is exactly what 180 Solutions, LLC brings to the table when reducing our client’s telecom costs. No large upfront fees, no time managing telecom inventories, no time getting pricing information and no time securing credits and refunds from overbilling/errors. Best of all, 180 Solutions, LLC is strictly paid a performance basis and does not advocate adding or switching a client’s current service.
In summary, TEM software is primarily focused towards those Fortune 500 size companies where the sheer volume of services is only manageable by a piece of software. The rest of world’s businesses would do much better by utilizing a hands on approach much like what is offered at 180 Solutions, LLC. Call us today to learn more about how 180 Solutions, LLC hands on approach can reduce your telecom expenses!