Recently, I have had the opportunity to talk with quite a few companies and their executives regarding their views on telecom expense management (TEM). Some have had previous experience with a TEM provider and others have not. The companies that have had previous experience communicated the following concerns:
- The engagement was purely Contingency. This is a model where the company does not spend any money up-front. Instead, the TEM provider receives a percentage of the savings obtained.
- The Contingency approach can cause animosity between the company and the TEM provider. Sometimes large savings are discovered and there can be disagreements regarding who found the savings opportunity.
- TEM providers have not produced the expected results.
- The costs are too expensive.
- The software or tool is too complicated and require dedicated staff to stay current.
- Too many times vendors try to take a “one- size-fits-all” approach.
The challenge for companies that have had a bad past experience with telecom expense management, is to pursue an offering that can overcome the hurdles from the past and create a scope of work that will lead to a successful relationship for telecom expense control.
Understanding the specific pain-points within the company, as it relates to telecom cost reduction, is still the key to the initial steps in a successful expense reduction analysis.