What is Telecom Expense Management?

Definition

TEM (Telecom Expense Management) is a business approach to rethinking telecom assets and expenses. TEM could be defined as a methodology companies or organizations have to reduce the costs and improve the operations of one of their most critical assets: the Telecom inventory and services they are using to support their business processes.

This strategy encompasses a rethink of:

  • the technologies used
  • the current processes 
  • the established telecoms policy
  • the supplier relationships
  • the resources dedicated to telecom management.


Why TEM on executives agenda?


A Fast Changing Environment

The rapid evolution and continuous introduction of new telecommunication technologies and devices bring with them complexity and permanent changes in procurement and inventory process.
The emergence of smartphones, the growth of mobile applications or rise of VoIP are a few significant examples.
This management of this complexity is a major challenge for enterprises seeking to effectively procure adequate services and negotiated contract compliance.


Telecom costs are soaring

Technology changes also imply constant modifications to rate plans and usages.
The invoice management is more and more difficult to check and optimize.  The suppliers’ offers and rates are complicated to understand, evaluate and compare.
The rise of data and mobility, the increased call volume or number of lines per user make the telecom’s costs explode.
Telecom expenses become consequently one of the top indirect costs of a company.


Facing the economic downturn

Due to increasing telecoms costs and the economic downturn, more and more European companies understand the substantial benefits of TEM and have placed a TEM project in their plan for the next year. For 65% of Western Europe companies, cutting telecom’s costs is a top business priority in the next 12 months. (Source: Forrester – Q&A: Value of TEM Solution in a recession, August 2009).


TEM in practical terms

A successful TEM program includes the following critical elements:

  • Consulting by seasoned TEM experts to identify your real needs
  • Software platform to capture and automate the complete procure-to-pay process
  • Optimization phase to identify and save costs and ensure a return on investment
  • Resources and skills (Business Process Outsourcing) to effectively and efficiently carry out recurring labor intensive tasks

TEM scope generally encompasses the following topics:

  • Devices and infrastructure inventory management
  • Sourcing/benchmarking of solutions and vendors
  • Contracts management
  • Dispute management
  • Business process Outsourcing
  • Telecom policy establishment and enforcement
  • Invoice management
  • Cost reduction
  • Tariff optimization
  • Reporting