Telecom Expense Management vs Technology Expense Management

17 April 2018 | Posted by Cass Information Systems, Inc.

Similar in name, similar in nature, identical in abbreviation and both rapidly expanding in popularity.

Telecom Expense Management (TEM) is a service that consolidates, manages, and optimizes the telecom environment to reduce costs and risk. Whereas, the new kid on the block, Technology Expense Management, claims to improve control and visibility across all IT services to minimize inefficiency and generate savings.

It's true, the definitions are similar. In fact, they’re virtually identical, save the comparative focus on telecom vs technology. But there's a good reason for this – it's because they are. In the telecom arena, technology expense management is just a constituent part of telecom expense management. And, while it's risen to prominence thanks to the growth of everything-as-a-service, it's not quite as groundbreaking and revolutionary as pithy marketing slogans would have you believe.

To explain the relationship more fully, we need to look back at the history of TEM.

A Brief History of Telecom Expense Management

In the mid-80s, telecom expense management was created to solve two distinct problems:

1) To Help Simplify the Sourcing, Evaluation and Mediation of Telecom Contracts

The negotiation of enterprise-level telecom contracts has always been notoriously complex. Not only does it involve untangling the telecom carriers’ incredibly complicated pricing on current services, but also includes negotiating various other, disparate networking technologies such as VoIP, MPLS, and, more recently, SD-WAN.

What’s more, if a new provider is required, the transition can take upwards of two years to complete, with disruption, downtime and your IT team's time consumed as a result.

2) To Ensure That, Once Negotiated, All Contract Terms Are Honored

Negotiation of carrier service contracts is just the first step. Once agreed, these organizations must deal with the inundation of monthly invoices – each one lengthy, convoluted, and potentially littered with errors.

According to Gartner, enterprises can expend up to a staggering 29.3% of their overall enterprise spend on telecom services, and, additionally, 80% of them are hit with billing errors which can quickly add up to vast sums at enterprise-level.

Enterprises were able to overcome these challenges by choosing to partner with a dedicated TEM provider. With visibility into telecom vendors and a deep understanding of what they were willing to give, TEM suppliers could help organizations get the best terms and optimum rates across all telecom offerings.

And, by conducting continuous, systematic telecom audits that review billing records, contracts, tariffs and inventories by location, as well as processing and disputing invoices, TEM providers could identify anomalies and resolve all billing errors so that contract rates were upheld.

Curious about the state of telecom expense management in 2023? Read the latest  Gartner Market Guide to learn more.

The Evolution of Telecom Expense Management

The value of such a solution changed the world of enterprise communications for the better. It allowed organizations to navigate the thicket of carriers offering long-distance, local, wireless and networking services at unpredictable rates.

But, as the telecom arena has evolved over the last few decades, so too has the service offered by TEM providers. As new trends have emerged, such as the rise of smartphones and the growth of flexible working practices, TEM has had to cater for increasingly sophisticated network services being offered under the telecom umbrella – services which are more crucial to enterprises’ day-to-day operations than ever before.

It’s not hyperbole to say that telecom provisions are no longer just another enterprise expense, because they offer a function that enterprises cannot live without. And to continue to help organizations overcome their challenges, TEM providers must diversify their offerings to provide support across a growing number of technologies.

This point is reinforced when you consider how common it is to see modern-day TEM vendors offering services such as bring your own device (BYOD), managed mobility services (MMS), and other IT expense support. The reality is that technology expense management is just the next evolution of TEM – not a separate service in its own right. 

Technology Expense Management

In the modern era, technology expense management is often used by sub-par TEM vendors as an attractive marketing tactic to draw in customers when their regular TEM service cannot stand up to scrutiny. The reality is that TEM vendors should offer a broad array of technology expense management elements as a matter of course within their TEM offering, and failure to do so is failing to provide an adequate service.

To summarize, if your vendor is trying to sell you a technology expense management solution, then one of two things are happening. Either they're attempting to charge you twice for the same service, or they're failing to provide you with an adequate TEM service in the first place. In both situations, you'll want to look at moving to a TEM provider who takes better care of your interests – enter Cass Telecom

Cass for Telecom Expense Management

At Cass, technology expense management is nothing new – in fact, we've been managing the costs of a wide variety of IT services for several years.

And that's not all. With a history of steady growth, years of enterprise-level expense management experience – including fourteen years within the telecom market – and an unparalleled customer retention record, we deliver tangible results built around the needs of enterprise organizations. 

Learn more about the representative vendors in the telecom expense management industry in the latest Gartner® market guide. It contains vendor profiles in the context of an up-to-date analysis of the market to help you choose the right partner for your needs.

New call-to-action

Topics: TEM

Get regular Telecom roundups direct to your inbox.