The evolution of Telecom Expense Management: from managing telecom costs to controlling all IT services
A brief history of Telecom Expense Management tem
Businesses’ needs tem
In the 80s, Telecom Expense Management (TEM) had to meet two needs: tem
- Simplification of telecom contract negotiations
Telecoms contracts at enterprise level have always been complex, because of the need to disentangle the complicated pricing structures of telecoms operators. What’s more, the transition to a new supplier can take a long time, causing disruption, downtime and mobilizing valuable IT team resources.
- Guarantee compliance with all contractual conditions once negotiated
Negotiating operator service contracts is only the first step. Once agreements have been reached, organizations are faced with an avalanche of monthly invoices, often lengthy, complex and error prone.
According to Gartner, companies can spend up to 29.3% of their overall budget on telecom services, and 80% of them encounter billing errors that add up to considerable sums at company level. Negotiating operators’ service contracts is therefore only the first step. Once agreements have been reached, organizations are faced with the task of checking a huge number of monthly invoices. This often lengthy and complex process can be prone to errors.
How does TEM meet these needs?
To solve these problems, companies have turned to TEM experts.
Telecom Expense Management is a process that involves managing and optimizing the costs associated with an organization’s telecoms services. This includes monitoring, analyzing and managing expenses related to fixed and mobile telephony, Internet, data, network and other communication services.
Telecom expense management aims to reduce excessive costs, optimize supplier contracts, identify billing errors, and ensure effective and efficient use of corporate communications resources.
This can be achieved by using specialized software, rigorous management processes and negotiation with suppliers.
The evolution of TEM as IT infrastructure is emerging
With the emergence of new trends, such as the rise of smartphones and their new uses, and the growth of remote working, TEM has had to adapt to increasingly sophisticated network services offered within the telecom’s framework.
Corporate IT infrastructure is growing by the day, and today’s companies rely heavily on enterprise software (office, collaborative or communications), equipment and IT services (the so-called Digital Workplace). The average company with between 200 and 500 employees uses up to 123 SaaS (Software-as-a-Service) applications with 19 unique billing owners (MarTech).
On a global scale, spending on the Digital Workplace and its maintenance will approach $4,000 billion by 2021 (Gartner).
This indicates that corporate IT spending goes beyond telecommunications, extending to the entire corporate IT infrastructure, which is growing by the day. To manage these new costs, as well as telecommunications expenses, Telecom Expense Management has included the entire corporate Digital Workplace in its management activities. This evolution has given rise to Technology Expense Management.
Definition of Technology Expense Management
Technology Expense Management deals with the management of IT equipment during its acquisition, deployment, maintenance during its lifecycle and finally its recovery or reconditioning. This includes managing contracts with suppliers, optimizing spending, analyzing usage and controlling invoices.
The services offered by a Technology Expense Management platform are identical to those of Telecom Expense Management, but they are differentiated by the inclusion of the Digital Workplace in its management processes. So, we’re talking about an evolution of Telecom Expense Management solutions.
Today, we’re talking about managing the carbon footprint of assets: A new challenge for today’s companies is to reduce the environmental impact of their IT equipment and extend their lifespan.
SaaS platforms offering Technology Expense Management services have begun to introduce carbon footprints, making it possible not only to calculate the CO2 emissions and lifespan of each piece of equipment, but also to compare actual data with the targets set.
ROI of Technology Expense Management
As mentioned in the previous paragraph, Technology Expense Management offers a wider range of services than Telecom Expense Management, which is limited to managing telecoms costs and contracts.
Such a comprehensive solution offers numerous benefits to the customer:
Financial operations management:
- Global management of suppliers, assets, invoices and contracts
- Budget control
- Consolidation of all costs, and breakdown of expenses by organization
- Service chargeback
- Real-time reporting
- Automatic import of all invoices
- Detection of billing errors
- Secure one-off payments
- Analysis of fixed telephony usage
- Call tracking
Operational performance:
- Visibility over the entire inventory, thanks to centralized asset management
- Simplified supply chain, thanks to order and catalog management
- Secure terminal operation
- Single point of contact for customers/operators/manufacturers/integrators
Environmental performance:
- Measurement of carbon footprint and definition of improvement targets and results
- Measuring the effects of good management
- Adaptation to each customer’s situation
- Progressive performance improvement
- Reduce digital carbon footprint
- Budget savings
The services offered by Technology Expense Management providers can be tailored to the individual needs of each company.
Telecom Expense Management (TEM) is a process that involves managing and optimizing the costs associated with an organization’s telecommunications services. This includes monitoring, analyzing and managing expenses related primarily to fixed, mobile and data telephony services.
Telecom expense management aims to reduce excessive costs, optimize supplier contracts, identify billing errors, and ensure effective and efficient use of corporate communications resources. This can be achieved using specialized software, rigorous management processes and negotiation with telecom service providers.
Objectives
- Eliminate unnecessary costs
- Automate processes
- Provide complete visibility over the entire IT asset inventory
The popularity of TEM tools is due to the diversity of their functionalities, such as invoice control, financial analysis, asset management and so on. Following the rise in popularity of the Digital Workplace, TEM has evolved to include IT services in its management acts. Today TEM has evolved into “Technology Expense Management”.