What is Telecom Expense Management? Where TEM came from….

As a followup to our TEM in 2014: History and Trends webinar (available as a stream or a white paper), we’ll offer a series of posts covering telecom expense management – where it came from, where it’s going, and trends for the future.

First Things First – What is TEM?

For those unfamiliar with the term, TEM stands for telecom expense management. Essentially, it means managing your wireless, voice, and data environment with the goals of reducing risk and cost. This is a process you can do yourself, or you can partner with a TEM firm to do some or all of it for you.  But how did TEM arise in the beginning?

Where We Came From – Old School TEM

As with any story, it’s best to start at the beginning.  So where did telecom expense management (TEM) come from in the first place?   Not surprisingly to anyone in the industry, the watershed moment was the breakup of Ma Bell (AT&T) in the 1980s.  Prior to that, with only one flavor of telecom provider to choose from, things weren’t very complicated.  But as competition kicked in, more options meant more room for flexibility – and error.  This drove the development of telecom expense management to bring visibility and control costs.

It started at the enterprise level.  Big companies were looking for big savings by taking advantage of the new situation.  But understanding the options, and being knowledgeable enough to weigh the choices, wasn’t a skill set most internal managers had.  Thus an entire new line of consulting sprang up to meet the need.

Services like RFP development and contract negotiation, invoice auditing of the more complex billing environment, procurement and management of telephone inventories all came together into Telecom Lifecycle Management.  And, in the early days at least, it was almost always fully outsourced.   “Here, you take this, figure it out, and hopefully save us some money in the process.”

Then as cellular phones came on board in the 90s, and data management in the 2000s, the need for telecom expense management firms only expanded.  Those firms, in turn, realized they needed a more robust way to deal with all the data they were managing, and software development began in earnest.   Platforms were developed to store and cross reference information, while also automating as many tasks as possible.

These original offerings were either used by the TEM firm directly to manage outsourced services, or hosted internally at the end user client, often at great expense and requiring a lot of care and feeding from IT.  This meant that solutions were pricey, hard to maintain, and over-engineered for anything other than a very large firm.