Today’s Chief Information Officer (CIO) wears many hats. Beyond the responsibility of managing information technology and computer systems, you’re expected to make strategic decisions, recommend improvements, and implement processes that’ll drive true value to your business.
And the expectations of CIOs continue to grow. You need to eliminate unnecessary spending and find new, long-term methods of optimizing costs.
Where do you start? Firstly, your telecom environment is a significant expense. In your large organization, it’s easy for costs to rise without you being aware of it.
Total European spending on IT and telecoms is estimated to reach $1.4 trillion by 2023. Meanwhile, CIO IT budgets are expected to grow by 3.6%. Reducing operational expenses in your telecom environment is an opportunity to free up more of your budget, find new technology opportunities, and implement transformational change in your business.
In this guide, we’ll show you how you can reduce operating expenses with the help of telecom expense management.
CIOs must establish a culture of proactive IT cost optimization to strengthen their position with their CEO and stakeholders.
What is Telecom Expense Management?
Telecom expense management (TEM) is a full lifecycle service that helps enterprises manage and optimize their telecom environment.
Your TEM provider works in partnership with your internal teams to support them and provide greater visibility into your telecom environment.
Telecom expense management includes:
- Continuous Auditing
- Invoice Management
- Chargeback and Allocation Management
- Benchmarking, Sourcing, and Procurement
- Telecom Inventory Management
- Expert Advice and Support
- Recycling and Reverse Logistics
Importantly, if you partner with an experienced TEM provider, they’ll have the right software, support, and expertise to begin optimizing your telecom environment immediately. They’ll unite your entire telecoms estate, including fixed-line and mobile processes, into one solution – streamlining visibility and reporting. All with the average industry implementation only taking 90 days.
Many North American enterprises use a telecom expense management service already, and it’s growing in popularity in Europe.
For CIOs looking to achieve meaningful ROI, TEM is a great place to start unlocking both immediate savings and long-term value.
How to Reduce Operating Expenses in Business
1. Identify Cost-Saving Opportunities
Telecom expense management providers give you a holistic view of the savings potential in your telecom environment. They achieve this with telecom expense auditing.
A telecom expense audit will take a deeper look at your entire telecom estate. This includes billing records, contracts, tariffs, and your telecom inventory.
Your TEM partner will audit every invoice line-by-line, providing greater accuracy as they manually document every inventory item to reveal cost-saving opportunities.
This information is stored in a centralized platform, giving your TEM partner and your team complete visibility of your entire telecom estate. You can also set up reporting and systematic auditing to get continuous visibility of your telecom expenses. Or your TEM partner can conduct a one-time audit, but continuous auditing is the better option, as you'll always be able to monitor for opportunities to save costs.
A telecom expense audit is a data-led and strategic method of reducing operating expenses in your business. For CIOs, it’s a great place to start identifying initial cost-saving opportunities.
2. Understand Your Baseline IT Costs
Beyond your telecom estate, it’s also important to get a full view of your baseline IT costs, including all software, systems, solutions, applications, and services used by your business.
A full view of all your baseline IT costs means you’re in a better position to make strategic decisions. It lets you determine which areas of your business have the highest operating costs and what IT has the most business impact. You can look at factors like business priorities and dependencies to understand where you can begin to minimize these costs.
3. Conduct Cost-benefit Analysis
Cost-benefit analysis helps you assess the advantages and disadvantages of making changes to your IT operating strategy.
It gives you a better sense of whether a change will provide value and whether there’s financial budget for it.
For example, you could look at things like return on investment (ROI) or proven ability to meet defined service level agreements (SLA) to determine whether a solution will add value to your business. If a solution can guarantee savings, then the benefits are valuable enough to justify the costs to your senior leadership team. Alternatively, if a solution has poor ROI or no proven SLA records, it’s a riskier choice.
Apply cost-benefit analysis to all the IT, software, solutions, and services that you’re currently using. Analyze the SLAs and ROI of all your IT vendors and providers.
Businesses are putting more scrutiny on service quality checkpoints. Look for SLA track records, years of experience, and identify roles and responsibilities in contracts when assessing a solution. Cass
4. Prioritize Your Opportunities
Every business is different. Your actions to reduce operating expenses in your business will ultimately need to align with your wider business objectives, your CIO KPIs, and leadership approval. It can be difficult to know where to start.
Look at your cost-benefit analysis and expense audit data to assess where you could be reducing operating costs in your business.
If you need to reduce costs in business-critical IT functions, take advantage of the “as-a-service” model of IT. This is where your business adopts software, infrastructure, or platforms that can be turned on and off or scaled as required – with the help of a managed service provider.
For example, telecom expense management is a service that you can use to optimize costs in your telecom environment. You can choose the level of partnership you require, whether your needs are simply a one-time audit of your telecom environment or a long-term partnership.
A fully-managed service gives your business access to experts who can optimize your processes – reducing the burden on your internal teams.
5. Improve Your Technology Expense Management
Changing methods of working have influenced a significant uplift in the adoption of software and solutions that enable remote working. This might be software-as-a-service subscriptions and licenses that let your teams continue working in hybrid and remote models.
Bring-Your-Own-Device (BYOD) models are more popular among C-suite leaders and end-users than ever. Across your telecom and mobility environment, there can be a significant expense sprawl that will continue to grow.
To reduce operating expenses in business, you need to improve how you manage your broader technology expenses, not just telecoms.
The right telecom expense management partner should be able to provide you with visibility across more than your telecoms. They’ll include wireline, wireless, and managed mobility spending all in one place with a single platform that centralizes reporting for all.
33% of CIOs
lead digital transformation initiatives
*Compared to just 23% of CEOs and just 9% of CTOs
Global Manufacturing Conglomerate Achieves $5.1 Million in Savings With Telecom Expense Management
With the right telecom expense management partner, you can transform your business and save significant operating expenses. Here’s how Cass partnered with a multinational manufacturing conglomerate.
A U.S.-based manufacturing business didn’t have visibility of their telecom environment or reliable processes. Business leaders were putting pressure on internal teams to improve end-user service and reporting. And poor visibility of telecom inventory and significant invoice processing late fees had created inefficiencies that they couldn’t ignore.
The organization was also using two separate systems to handle fixed-line and mobile services, reducing the quality of reporting.
Cass consolidated their fixed-line and mobile processes into one cloud-based solution, streamlining visibility and reporting. Then, our audit specialists identified cost savings and improved processes for telecom inventory management.
Finally, we developed reporting that improved data quality so that business leaders could better understand operating costs.
Want to know how much telecom expense management could save your organization? Try our easy-to-use ROI calculator today.