Best Practices: How to buy technology expense-management services

Buying technology services for an enterprise is a big undertaking and an expensive one, so it can be smart to use yet another service – technology expense-management (TEM) – to help maintain control over what you spend and what you get.

expense reports

Technology expense-management (TEM) is a service that is of ever-increasing importance to enterprise buyers because it touches on virtually all aspects of the technology lifecycle.

In the past, TEM was defined as telecom expense management, and it was largely focused on managing wireline and wireless telecommunications. However, it has now emerged to encompass the ever-expanding universe of networking technologies and services spend including managed services, maintenance, hosting and cloud services. As these technologies become more complicated and expensive, many enterprise users have availed themselves of third-party TEM services to help manage some or all of these expenses.

Buying TEM services should be approached in the same way your enterprise purchases other technology services. To begin, you must determine which services will be subject to TEM oversight. After determining the in-scope services, you should gather the important metrics for each service. Finally, you should research the market and competitively source the services through an RFP process to achieve the optimal deal.

Define what you need

In determining the in-scope services, consider which technologies you would like the TEM to manage and then determine some basic metrics about that spend such as annual spend, number of invoices and number of suppliers. Quantifying the spend by technology or service type will assist you in determining whether a particular technology should be in scope. It is not necessary to use TEM services for services for which spend is trivial.

If your enterprise has a global reach, be sure to capture the above metrics by region (North America, Latin America, Europe/Mideast, Asia) as the quality, nature and price of each TEM provider’s services vary by region as does the service-delivery location by the underlying supplier. The good news is that if you have an incumbent TEM provider, detailed reports containing this information should be readily available. If you do not have an incumbent TEM provider, you will have a bit of research to do, but all this information should be available from your service providers and by coordinating with your internal accounts payable and finance departments.

After gathering data about services and spend, the next step is to educate yourself about the current market for TEM services. Up-to-date information is critical in this ever-evolving marketplace, as each new year brings: Mergers and acquisitions in the provider roster; changes in scope for areas like wireless and technology spend management; and the changing global reach of each provider’s suite of services. Don’t rely on market-research information more than six months old, as the field of players is constantly changing. Once this market research is complete, you can determine which providers might best fit your requirements.

Pre-screen the providers

Prior to issuing an RFP, it can be surprisingly productive to spend a few days hosting meetings with a group of six to eight TEM companies and then objectively ranking them in terms of ability to meet your requirements. You can use these meetings to learn more about the specific services that the vendors can provide including invoice receipt, processing and payment, auditing and dispute management, provisioning and inventory management, as well as contract management functions.

These sessions will be invaluable if you are new to TEM and will also be very educational for old hands, as the services

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