For global businesses, telecom services can be complicated.
However, understanding how much you're paying for those services shouldn't be.
Unfortunately, for many enterprise-level bills, it’s hard to get a clear picture of what your business is actually paying for and where there are opportunities to reduce your costs.
This is where telecom expense management (TEM) can be a game-changer. TEM helps businesses take control of their costs and remove the administrative burden internal staff can feel as they struggle to make sense of it all on their own.
This article explores some key elements of telecom expense management, how it can streamline your operational costs, and the benefits it can deliver to your workflow and bottom line.
Companies Struggle with Telecom Expense Management
Unlike a production line or software product, it can be more difficult to perceive the scope of your organization's telecom environment. Without this visibility, it can be challenging to identify savings, evaluate actual usage needs, and plan for the future. Instead, over time, these telecom costs can go unnoticed and pile up.
Add in global locations, and these issues prove even more difficult, forcing organizations to deal with multiple bills and contracts from different providers. For example, invoice quality can vary dramatically between carriers, with some able to provide focused, detailed information about your telecom environment and others only providing summarized costs.
Telecom expense management can help enterprises understand their bills and how best to manage them.
What Does Your Company Pay For?
Companies rely heavily on telecommunication services, including telephones, mobile phones, wireless internet connectivity, and cloud services. Each circuit needs to be paid for on time and in line with the level and quality of service the business expects.
When dealing with enterprise-wide contracts encompassing a large telecom environment, keeping track of every change to your payments can be difficult. Costs may increase without your awareness, especially if a bill covers hundreds of circuits. Without sufficient information from the carrier, it can be impossible to see the complete picture of how much you’re paying for telecom services. As a result, you might overpay.
A telecom expense management provider can help by using tools and decades of experience to audit invoices and identify potential unused services or unknown cost increases.
The Components of the Bill
Telecom bills can be broken down into different categories.
Monthly recurring charges (MRC) are costs a company must pay each month to continue using a service. Organizations must pay for each of their connected circuits and will likely have a contract for each one. These monthly costs include line rental and service charges for each inventory item, which should be the same each month. On the other hand, usage charges can vary each month based on the amount of data needed and consumed. If the vendor provides managed services, that will also factor into the bill.
Non-recurring charges (NRC) are one-time payments. These one-off costs are generally for the purchase of a new device, which involves services such as installation and disconnection of previous circuits.
Other charges, including regulatory and pass-through fees, will also be included in the bill. These will vary depending on the type of circuit and the location.
Finally, of course, there are taxes on top of these charges.
When the telecom bill is broken down like this, it is much easier to understand the types of costs. However, this frequently isn’t the case; data can be obfuscated with overly technical language or summarized to make it harder to determine the actual services and costs involved.
Understanding Bill Delivery and Its Impact on Expense Management
To truly understand its telecom spend, an organization can develop a telecom expense management program consisting of internal staff, tools, and data or outsource these services to an outside expert. In either situation, without enough data from the carrier, any TEM program will struggle to grasp the costs involved and, ultimately, fail to optimize telecom spend.
The primary source of TEM data is, of course, the carrier’s invoice. Unfortunately, billing quality varies between carriers, but the more detailed your telecom bills, the more information you can glean. In the US, most carriers support electronic data interchange (EDI) Level 9, which means carriers will provide your business with the greatest detail regarding your circuit inventory and the features you’re paying for.
More specifically, EDI Level 9 looks at the individual employees within your enterprise and their assigned circuits. This level of billing information allows you to know precisely what you’re paying per person, which is helpful when a TEM program is working to understand your telecom bills and identify cost savings.
However, some carriers only provide their invoices on paper and, as a result, only include a vague summary of billing information. This summary might include an overview of a sales team or regional division's costs without breaking them down into individual circuits or plans. Such limited detail makes it difficult to identify opportunities to reduce overall costs.
What Are the Hidden Costs of Telecom Services?
Even with additional detail, telecom costs are difficult to manage. As a result, customers often just pay the price they are quoted.
When this happens, it is easy for hidden costs to add up. For instance, if your organization operates across different locations, basic wireline spending may vary between these jurisdictions, with pricing varying widely. This is why it is important for organizations to carefully inspect their telecom costs and find ways to negotiate rates to ensure they’re paying a fair price for their wireline services.
However, not every organization has the internal tools, experience, and expertise to perform this audit function, dispute and correct charges with a provider, and negotiate new rates. This expertise will also need to account for nuances across regions, which can provide additional negotiation strength to win more significant incentives from carriers.
Finally, carriers may try to impose unnecessary features on your plans, which might be free for a period but then be billed to your company with an automatic renewal you didn’t know about. For each of these situations, a telecom expense management provider can work with a business to take on the role of auditor, negotiator, and mediator between the carrier and your business. These outside providers already know and understand the different plans, regional nuances, and how carriers work, giving them an advantage that is hard for many internal TEM teams to replicate.
How TEM Providers Can Help
Hiring a TEM vendor takes the pressure off your business to deal with telecom services, freeing up internal resources to focus on more strategic initiatives.
Telecom expense management covers many areas, from reviewing and dealing with vendors to auditing invoices and negotiating contracts. With a comprehensive view of your telecom environment, a TEM provider can optimize your company’s telecom costs, identify savings, and prevent errors and overcharges. These outside experts can also ensure that invoices are paid correctly and optimize inventory to better align with your employees’ actual telecom needs.
Perhaps most importantly, an experienced telecom expense management provider can manage the carriers on behalf of your business, assisting on both a local and regional scale. This can give your business the leverage it needs to get the best deals on fixed-line contracts and ensure you get precisely what you pay for.
Similarly, TEM providers can provide continuous telecom audits to identify and fix billing errors, particularly concerning discounts and benefits carriers have agreed upon. A TEM provider can monitor costs in real time to ensure no month suffers from hidden or unforeseen expenses.
Ultimately, an experienced TEM provider alleviates the stress of dealing with carriers and confusing, opaque telecom sales and plans.
What Cass’s Telecom Expense Management Can Do For Your Business
Cass’s experts were brought in to help a global client optimize its telecom expense management. Despite having another outside TEM provider, within one year, Cass was able to identify cost savings, renegotiate pricing, and right-size telecom services that led to more than $2 million in cost reductions and 98 percent inventory accuracy achieved in under nine months.
Want to learn more about how the Cass team tackled these challenges and how we can do the same for your business?
Topics: TEM
