What Does 2024 Hold for Telecom Expense Management?

12 December 2023 | Posted by Cass Information Systems, Inc.

The telecom expense management (TEM) market has seen some exciting developments in recent years. From automation capabilities that speed up processes to helping enterprises overcome their financial skills gap, telecom expense management services continue to be the support partner of choice for global enterprises.

So it’s no surprise that the telecom expense management market continues to grow. It’s expected to reach a valuation of $11.9 billion by 2032, but what's driving this growth?

Let’s explore the developments and market trends driving telecom expense management in the year ahead.

1. Data Security

By 2026, 70% of boards will include one member with cybersecurity expertise. Cybersecurity is a top strategic priority that isn’t the sole responsibility of IT departments. Enterprise decision-makers have an appetite for managing cybersecurity concerns, and increased scrutiny of data governance and security reflects this change.

Telecom expense management vendors must demonstrate their cybersecurity credentials to keep pace with the rapidly changing cybersecurity landscape. A great telecom expense management partner will ensure data is:

  • Secure and protected
  • Stored correctly
  • Access controlled

Importantly, 10% of large enterprises will have a comprehensive and measurable zero-trust cybersecurity program by 2026 – up from less than 1% today. Zero-trust policies encompass strict access control frameworks. Telecom expense management providers must adapt their services, which handle large amounts of data, to support the hyper-secure businesses of the future.

2. Financial Stability

The unsteady global economic climate impacts businesses of all shapes and sizes, and telecom expense management clients are no different. However, financial uncertainty means that enterprises are eager to work with stable and financially secure partners.

Telecom expense management vendors must demonstrate financial stability in the years ahead. Not only must they show a record as a well-established and industry-recognized vendor, but customers will want evidence of their credentials too. This could be by demonstrating strong financial performance through audited financial statements.

3. Merger and Acquisition Activity

Merger and acquisition activity has ushered in a wave of change in the telecom expense management market, but it can cause disruption, too. Roughly 30% of employees are made redundant in the same industry after two companies in the same industry merge, which doesn’t always bode well for customers. It can result in account management churn, where telecom expense management clients must deal with multiple people as vendors manage their transition.

In the coming year, stability will be a significant differentiator. Telecom expense management partners that aren't likely to be part of a merger or acquisition are desirable to work with.

4. Market Uncertainty

Increased interest rates have impacted the cost of capital, while global inflation has increased costs, too. Businesses everywhere are feeling the squeeze on their budgets. And this has put a lot of pressure on the C-suite to deliver. Chief Financial Officers (CFOs) and Chief Information Officers (CIOs) are looking for more ways to reduce their operating expenses.

Today’s CIOs must establish a culture of proactive IT cost optimization to strengthen their position with their CEO and stakeholders. While 77% of CFOs are deploying cost-cutting measures.

Telecom expense management services will be a vital pillar that supports the C-suite in the coming year. It provides more opportunities to optimize operating costs, manage telecom budgets, and identify cost savings.

5. The Talent Skills Gap

Today’s financial talent is hard to come by. 81% of CFOs report a talent shortage in accounting roles, and 49% say they lack the required headcount for their financial operations.

This highlights the role telecom expense management partners will play in the coming years. Decision-makers can fill their talent gap with support from expert, industry-accredited professionals who act as a meaningful extension of their internal team, rather than replacing it outright.

Telecom expense management providers will need to support with optimizing costs and centralized software for every end-user, including internal financial teams, who need access to data. This lets internal financial teams, CFOs, CIOs, and the telecom expense management provider work together to truly optimize their expenses – all while overcoming the talent shortage.

6. A Single Source of Truth

Financial processes require a single source of truth. This means aggregating data from multiple sources into a single location, to ensure that everyone in an organization can make their best business decisions using the same data.

Telecom expense management helps organizations manage their data in one comprehensive system and achieve the decision-readiness they need. And key features like telecom expense reporting and telecom inventory management are all in one place.

For businesses looking to be responsive and agile in the coming year, telecom expense management services, and software, will be a key differentiator.

Stability is Key in Today's Telecom Expense Management Market

The world is in a state of flux, so decision-makers are looking for stability more than ever before. Telecom expense management providers will need to support in these areas in the future:

  • Business strategies. Cost optimization, rolling expense auditing, and inventory management will help businesses stay in control of their costs.
  • Talent. Filling the financial skills gap by acting as an extension of enterprise teams, not just a replacement, will empower businesses with better knowledge.
  • Data and analytics capabilities. A single source of truth, as well as automation specific to invoices, will help manage large amounts of invoices.

Get regular Telecom roundups direct to your inbox.