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Buyers of Telecom Expense Management: Confronting a Post-Pandemic World

In the wake of the global pandemic, the world of hybrid work is spawning an array of new challenges for enterprises. Large global multinationals are wrestling with a daunting set of concerns when it comes to their telecom services, for which they might spend anywhere from $20–$300 million annually. Many of those multinationals also now manage anywhere from 10,000–500,000 devices.

As a result, such firms are focused on identifying the best telecom expense management (TEM) solutions like never before. Simply stated, TEM tracks telecom (voice and data) assets and related expenses within the enterprise. Many TEM providers feature some combination of a BPO and SaaS/Hosted model. The objective is to gain increased control over inventory and costs across the cloud, mobile, wireline, the Internet of Things (IoT), and more.

Intriguingly, a host of particularly complex issues are confounding three specific segments within legacy TEM buyers at the typical global enterprise. In their struggles, these three personas demonstrate how essential it is for them to work with a highly professional, agile, and strategic TEM partner.

Persona 1: Procurement… Grappling with that 40%

The procurement department plays a pivotal and strategic role in sourcing and managing enterprise telecom, cloud, and other IT expenses. It’s no small task. Telecom services – including network, mobility, and associated devices – account for as much as 40% of the typical IT budget. As such, within large enterprises, the procurement department is expected to drive both innovation and value, while balancing mandates for operational efficiencies, supply chain and risk management, and cost reduction.

In other words, even as procurement – which too often labors under a lack of resources – seeks to source and (hopefully) transform the network, it also must seek to optimize telecom spend. Procurement is expected to improve telecom vendor performance while supporting IT with all required tools, data, and services.

Meantime, telecom supply chain transparency remains poor, with procurement leaders having limited or no visibility beyond their tier 1 suppliers. Getting an accurate view of telecom inventory, usage and spend is frequently unwieldy, with gaps in data that severely limit both negotiating power and cost reduction opportunities. Chief procurement officers (CPOs) have a difficult time driving sourcing value for the organization without accurate inventory and verified usage and spend data.

Interestingly, according to Deloitte’s 2021 Global Chief Procurement Officer Survey, driving operational efficiencies took the top spot over spend reduction (2nd spot) for the first time. Additional key priorities include digital transformation (ranked 3rd) and innovation (ranked 4th).

Persona 2:  IT/Telecom/Mobility… a Byzantine Endeavor

Now consider IT/telecom/mobility professionals. They are actively focused on everything from cost containment and cost reduction to lack of visibility into spending and inventory. They also struggle with reporting and articulating IT spend in a manner that others across the enterprise can understand. And of course, multiple systems with multiple owners always pose a risk of duplicated efforts and gaps in data.

Consider that IT leaders are tasked with arming the enterprise to drive innovation and growth while keeping service levels high and costs down. But managing communications-related costs and inventory over distributed and complex environments is a byzantine endeavor. Teams face real challenges with the complexities inherent in a widening range of fixed and mobile communication services, complexity of workflows without purpose-built tools, the ongoing demands of a remote workforce, as well as the expansion of cloud-based services and IoT devices.

Oftentimes, the combination of these disparate challenges result in a lack of efficiency, a frustrated delivery organization, and poor visibility into telecommunications and IT-related spend. All of this has the potential to hamper the progress and success of digital transformation initiatives demanded by CEOs and their boards.

Persona 3: Finance… Chasing Mastery

Finally, note what’s happening in the typical finance department. These professionals confront their own incomplete picture of telecom costs. That could mean everything from the automation of workflows and how that affects spend allocation, accruals, and bill payment, to improper cost allocation, which often leads to complaints from IT and other lines of business (LOBs). And what about budget reduction requirements and the need to pay bills on time, which could involve everything from late fees to disconnects and overpayments?

All the while, finance rarely seems to possess a complete mastery of TEM-related issues, from process and automation to that clear line-of-sight into the true state of the enterprise communications landscape. The typical process for invoice receipt, validation, allocation, and payment is too manual and time consuming. The typical “spend view” is an attempt at understanding by gazing in the rearview mirror – trying to identify, validate, track, and pay for services that shift constantly as a result of an expanding remote workforce, ongoing mobile technology innovations, and always changing carrier rates and equipment plans.

Unsurprisingly, finance is increasingly frustrated by shifting and inaccurate telecom service inventories that have a significant downstream impact on validating invoice accuracy, ensuring correct department charge-back costs, potential cost savings, and future expense forecasting. Done right, TEM services automate the invoice receipt to pay workflows, deliver cost savings, and provide improved spend visibility across the organization.

An Opportunity for TEM Providers to Answer the Call

In the new world emerging from the challenges of Covid19, TEM, in all its detail and complexity, demands patience and skill. TEM software and TEM services are designed to work together to deliver superior outcomes; both feature complex solutions rich with detail and integrated workflows.

TEM services also require a vast array of practice areas and the organizational efficiency and discipline to go with them. And they require too a coherent, high-functioning engineering team. Above all, top TEM providers should feature strong leadership with lengthy tenure.

Ultimately, a big part of service quality in TEM comes down to a service provider’s ability to add strategic value by simplifying the complex telecom estate in pursuit of efficiency at a time of chaotic change. Global enterprises should therefore do their research and due diligence to find strategic partners they can trust. The successful future of work demands it.

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