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Monthly Archives: March 2012
FAQ: What is Telecom Expense Management?
We thought we’d run a series of blog posts covering some of the “frequently asked questions” we come across. Some of these will be pretty basic, but I hope to get into more detailed descriptions of some of the services we offer, to de-mystify telecom expense management as much as possible. It may seem like magic, but it doesn’t need to be a secret!
What is Telecom Expense Management?
The short and dirty way I sometimes explain this is - “If it rings, or connects to the internet, we make it cheaper.” Simplified? Yes. But it gets the point across. In a nutshell, most firms pay too much for their voice, wireless and data services. “Telecom Expense Management”, as an industry, evolved to address that problem.
Essentially, it refers to the overall monitoring and handling of landline/cell/smart phones, internet service, and wireless devices (like tablets) for your company. This is a process you can do yourself, via a web-based software platform like Clearview, or you can partner with a firm like Valicom to do it for you. Whoever does it, in plain language, it means tracking your inventory better, gathering your telecom bills and looking for overcharges through a telecom audit, searching for contract violations, optimizing your environment to minimize costs, finding creative ways to save money, and negotiating directly with vendors to get a better deal.
Why would you want to do this? There are a number of reasons….
Improve Profits
- Identify significant savings on your telecom expenses
- Eliminate fraud and unauthorized charges
- Identify errors and recover funds through close inspection or an outsourced audit of your wireline and wireless services
Streamline Operations
- Reallocate personnel to focus on strategic core competencies
- Streamline order fulfillment, auditing, asset management, and payment processes
- Realize more efficient use of employee time
Reduce Risk
- Assure corporate business policy and regulatory compliance
- Increase accuracy in expense tracking and reporting
- Achieve financial goals through no-risk investment models
Now that you know what TEM means, HOW these services are delivered is up to you. Valicom is unique in that our TEM offering ranges from “We do it for you”, to “We do it together”, to “You do it yourself.” This allows us to offer flexible options and pricing to match the needs of most businesses spending $100K a year or more on telecom. We also work with IT and telecom consultants, plus a variety of partners, to deliver TEM to the market.
Want more info? Download our White Paper “Plugging the Leak: Six Steps Towards Managing Your Telecom Expenses”
Cursory Telecom Invoice Auditing – Software Tools Make it Easy
We just talked about how Cursory telecom invoice auditing can reap huge rewards. Now lets talk about tools to make that process easier.
Telecom expense management software can be a useful tool in the process of identifying cursory audit items. The program can visually show you your invoice queue, reflecting legitimate invoices that are pushed through the tool, providing one month and six month cost trending information along with percentage variances.
It also offers flags certain cursory audit items you should watch for, such as:
- Third party downloads for wireless services
- “Thrifty” invoices which reflect high long distance rates because the local line that the calls are associated with have not been added to the contract.
- “Slamming” which occurs when your chosen long distance carrier on a local line or trunk is changed to another vendor without your authorization and is billed at a much higher “casual billing” rate.
- “Cramming” which is the term used for third party charges that appear on your local bill for services you have not authorized.
Once you can see what you’re doing, it is far easier to track down the things that are bloating your telecom budget so you can deal with them. As we like to say, “When You See; You Save.”
See how Clearview TEM Software makes cursory auditing easy. Get a Demo.
Telecom Savings Case Study – Cursory Telecom Invoice Auditing
Want a good example of low hanging fruit? Cursory telecom invoice auditing. Whether you do it yourself via a web-based telecom expense management software like Clearview, or hire an outside TEM firm to do it for you, this is a first step in cleaning out your telecom closet. Cursory auditing just means identifying, flagging, and correcting easy-to-find issues during regular telecom invoice processing. In other words, actually LOOK at your bills and see what is wrong.
Here’s how well something that easy can work. The following is a case study outline of a company who saved over $104,000 by implementing cursory audit findings:
- Nationwide Accounting Firm
- 1800 Employees
- Using TEM Solution for 7 Years
- SaaS Powered BPO – 5 years. Pure SaaS – 2 years
- $1.8M Annual Telecom Spend
$104,300 Cursory Audit Savings
$673,000 Annualized Savings Overall
Here’s an example: One of their PRI’s had reverted to tariff rate in the middle of their contract. Charges went up from $500 to over $2,000 per month. By correcting this error, they were able to affect cost avoidance of $19,000 annually and received a credit of over $3,000 for the two months in which this overcharge occurred.
See how Clearview TEM Software makes cursory auditing easy. Get a Demo.
Telecom Expense Management – Not Just for the Big Boys Anymore
Being in telecom expense management for over twenty years, Valicom has seen a lot of trends come and go. Something that is trending now, and that we don’t see stopping anytime soon, is the adoption of telecom expense management tactics by smaller and smaller firms. What used to be the territory of enterprise-size giants is slowly sneaking into the mid-market and even some SMBs.
This is a topic Aberdeen was talking about as early as 2010. (see below) The need was there, but firms didn’t quite know how to adopt telecom expense management best practices. The math supported figuring it out though, as an AOTMP report showed that “SMBs that had a TEM program spent 22% less than companies who do not”.
So how have those predictions matured? Rapidly, to say the least. We see a big growth in mid-market firms seeking solutions, especially driven by wireless complexity and costs. One firm that reached out to us said “We don’t know what is going on, but our cell costs have gone up about ten-fold in the last year. Can you help us figure it out?”
Another thing firms are seeking is software. Web-based, inexpensive, robust tools to keep track of costs, changes, inventory and contracts. Our SaaS program Clearview has been popular in filling that need. It gives firms the entry point, a way to start doing something about their telecom mess. Then they build out solutions from there. Clients using our software often come back looking for help with other things, from invoice data loading to telecom carrier contract negotiation. The trend is towards these open, flexible, unique options – only use the services you want, when you want them.
If you’re interested in seeing how a scalable TEM solution could work for your mid-market or SMB, feel free to contact us for a discussion and a demo of Clearview.
“Can TEM SaaS Solutions Lower Telecom Expenses For Mid Market Companies?”
Explore Aberdeen Research study results around low cost, web-based telecom expense management tools for small to mid-sized businesses, with a discussion of how larger firms are using such options to great advantage. Register and download now
Use new information technologies to transform your business models
Guest post by Kay Plantes
Kay Plantes is an MIT-trained economist, business strategy consultant, columnist and author. Business model innovation, strategic leadership and smart economic policies are her professional passions.
She resides in Madison, Wisconsin and Oslo, Norway.
Use new information technologies to transform your business models
The newest information technologies on the block – social, mobile, cloud and data analytics – can and should do more than boost your organization’s efficiency. Far more than past IT innovations, these new technologies can positively transform your organization – where it competes, why it wins and how it operates. Smart leaders understand this. Meet one in this blog.
As a young but experienced telecommunications industry professional, Nancy Peckham founded Madison, Wisconsin-based Valicom in 1991 to help companies reduce telecommunication costs. Valicom’s value promise for its direct services is very powerful: “We average 30.4% savings in telecom expenses across our client base,” according to CEO Peckham. Her company produces this savings by helping clients better manage the complex supply chain associated with providing their workforces with wired and wireless voice and data communications, internet connections, and wireless services.
As device options and mobile communications expanded, this expense area has become increasingly complex, with a lot of data errors in billing, averaging 5-12% according to Forrester Research. In Valicom’s 20+ years of doing telecom audits, they’ve found that over 35% of invoices have some type of error. Often these errors remain hidden without an audit. “One memorable client example is a health care facility that had torn down a building. But our audit,” according to Peckham, “determined that they had been getting billed and therefore paying for fifty landline telephones in a ghost building that was now a parking lot! For twelve years!”
Valicom’s original business model provides direct services through consultants who audit client telecommunications bills, secure the right plans, order devices and manage their inventories, negotiate contracts, process invoices, allocate costs to the right budget lines and benchmark overall spending. An internal IT platform enables consultants to do this work efficiently and effectively. The model was not easily scalable, however. Furthermore, Valicom faced growing competition from Accenture and other consultancies whose names were “top of mind” in IT and CFO departments.
What to do? Midsize companies, Peckham determined, had similar telecom expense management needs to larger companies, but could not easily afford direct services. This insight led Peckham to leverage its internal platform to create a “software as a service” business model that cost-effectively addresses the needs of mid-size clients at a price they can afford.
The new solution opened doors beyond CIO, CFO and Telecom Managers in mid-size companies. Managed Service Providers, Telecom consultants and Telecom agents also benefit from the SaaS solution. By serving the needs of these under-served markets, Valicom has been able to achieve 21% more revenue and 18% more profitability over the past year.
The new approach to providing services also makes Valicom more customer-centric. According to Peckham, “Through the development of Clearview, our software as a service tool, we are well-positioned to give our clients the choices they need to fit how they want to do business. All three bases are covered, from our fully outsourced model (We Do It) to our hybrid model (We Do It Together) to our self-serve model (You Do It).”
The change had its moments, to be sure, as it was crucial that Valicom execute well while continuing to provide a high level of service to its clients and partners. During the development phase, the research, design and actual work involved to adapt Clearview to the Software-as-a-Service (SaaS) was new in terms of functionality and architecture. “This new business model was a new line of thinking for us internally. We not only had to navigate and educate our clients and partners, but also our own internal resources. With the new software, we are continuing to learn and adjust to ensure our operational efficiency, as we continue to gather ongoing feedback from our clients and partners for continued software enhancements,” Peckham shared.
It would have been natural for Peckham to look at new technology opportunities solely through the lens of “How can they make my consultants more efficient and my company more profitable?” Instead, the strong strategic leader asked different questions: “How can I use these new technologies to reach new markets with a hard-to-copy value promise? How can I use them to offer existing customers an even better customer experience?”
How are you thinking about and applying social, data analytics, mobile and cloud technologies in your enterprise?