Telecom expense management 2006
NetworkWorld.com, 02/07/06
Network managers tasked with managing their company’s telecom budget are familiar with the fact that their bills are often incorrect.
From charges for circuits that should have been disconnected years ago to using old, higher rates for current data lines, errors are not uncommon.
The largest service providers in effect not only created a need for the telecom expense management (TEM) industry, but they keep it going. Companies such as Rivermine provide software and managed TEM services.
Traq specifically offers products used to not only manage wireless expenses, but handheld devices and service plans. And some carriers, including Sprint Nextel and AT&T are offering managed services using Traq’s systems.
Other companies such as ProfitLine and Vercuity offer bill auditing and TEM services. These companies do not make and sell their own software and systems.
As SBC and AT&T meld and Verizon and MCI do the same business users may just find an increased need for TEM products or services.
Network executives have to keep up with which carrier’s billing system will be eliminated and which will take over. This simply creates an environment ripe for disaster and errors, which could be costly.
I’m not trying to say that AT&T and Verizon are trying to profit or take advantage of the situation. But the fact is blending four telecom giants into two can be troublesome.
This is just one new issue for telecom managers to keep an eye on. Are there other TEM issues that have come up in the last six to 12 months for you that you’ve never experienced before? If so, let us know. We’re just getting started on a story looking at the newest TEM headaches users should look out for. Drop us a line if you’ve come across something you’d like to share with your telecom manager brethren.
-Denise Pappalardo (denisep@nww.com)
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Comments
Denise,
I am actually pioneering in TEM space as a consultant with a bit of a twist. Instead of auditing invoices or selling software or managed services, I focus on business process improvement and part of that focus can be on helping clients find an appropriate TEM solution.
I know what the players in the TEM space are capable of. I think you are might to the extent that billing errors spawned the TEM industry, but it is not going to sustain it.
Truth be told, the value the TEM application brings to the table is “visibility”. While the apps are great at finding billing errors, most far-flung enterprises have a bigger problem with abandoned services and off-contract service. Most of the time (though not always), it’s the result of bad inventory management habits. You can’t really blame the vendor when you didn’t disconnect that bank of POTS lines two years ago. TEM applications, at least the more sophisticated ones allow enterprises to capture inventory, costs and contract data.
My concern with the mergers is that some of the merged companies might choose “door #3)” and come out with an entirely new set of billing systems. Legacy MCI was just starting to get their act together and drops some of their 15 different bills. Verizon actually has built a lot of good processes into root cause analysis and are greatly ahead of the industry in SOX accuracy. There is definitely going to be a culture clash there.
I am not sure anybody in the TEM space knows what to expect. The concern ought to be that they will not be able to make the adjustment fast enough and companies who have depended on their TEM provided to do the processing are going to be stuck in no man’s land where they can’t get there bills paid.
Posted by: Steve on February 9, 2006 02:48 PM
Denise,
This is a very ripe area for investigation because this part of the network world is changing very rapidly, not only because of the various carrier mergers, but also because of the merger of Voice and IT responsibilites to a single department in the enterprise brought on by VoIP, MPLS and other technology or economic initiatives.
One of the unspoken truths about managing the P&L in large corporations is that there is no effective, fully automated system to control one of the largest areas of corporate spending: voice and data network services. The amount of money spent in providing voice and data services to every corner of the organization can be staggering – estimated at between 1% and 3% of the company’s total revenue. Wireless spending is the fastest growing item on the P&L. While ERP systems manage vendor relationships and spending for almost every other company expense, these sophisticated supply chain management techniques have not yet been applied to the telecom network.
Forward-looking companies and even certain carriers have begun to talk in terms of "Billing SLA's" and are providing solutions to extend legacy BSS/OSS systems to create an extended architecture for collaborative supply chain management.
Unlike vendors that offer to “audit” your telecom bills or that provide “telecom expense management” services, products like CommADVISOR provide a complete and 100% automated supply-chain management solution across all enterprise telecom requirements. Imagine an integrated view of all contracts, orders, inventory and billing in one place. Take action to persistently optimize service contracts and new service orders. Model and forecast alternative plans that can be put into place immediately with your telecom vendors to maximize economic value. Detect errors in vendor invoices immediately, before the bills are paid, and without needing outside auditors. Through insights gained from automated analysis, a series of actionable, mission critical metrics can be visualized at your desktop, in real-time, while it can still make a difference in current business results.
While many enterprise users have realized the inherent limitations of TEM, the lessons learned provide the tipping point that is now driving the growth of highly automated telecom supply chain management for use within the enterprise.
-Dave Snow
Posted by: Dave Snow on February 13, 2006 01:38 PM
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