Over the past 25 years or so, the TEM industry has evolved significantly. In the earlier days of the industry in the late nineties, enterprise expense management teams realized that they would need help with processing of their vendor invoicing, especially telecommunications invoicing.
Many would opt for on-premises installed software whereby their internal expense management teams could load vendor invoicing into the technology platform themselves for vendor processing and payment.
The on-premises offering is one of three common offerings within the expense management industry. As time has passed, the host and load and fully managed TEM solutions have increased in popularity. We’ll address each in more detail below:
On-Premises TEM Solution
This type of solution is often referred to as “on-prem” and companies with sensitive security concerns would be drawn to this option. The service support is more basic but you are leveraging powerful software and have full control over security so many enterprises found this appealing, especially governmental entities given their natural focus on information security.
Host and Load TEM Solution
Another popular option is commonly referred to as the “host and load” or do-it-yourself option via the TEM provider Software as a Service (SaaS) platform. This allows companies to harness the power of a TEM provider’s software without needing to host the solution on their premises.
This option is also more of a half step into third party TEM support because it – like the on-premises option – does not include many of the key managed TEM services in the fully managed TEM program that most TEM providers also offer.
For enterprises that soberly recognize they are in real need of help but cannot yet commit to a fully managed TEM program, this is a good start.
Fully Managed TEM Solution
Today, more enterprises are wisely opting for a fully Managed TEM service. With such a service, you typically get all core expense management support services from a TEM provider, which in today’s fast-paced and highly technological world is important.
There is no one-size-fits-all solution, but the trend today is certainly towards a more fully managed TEM service.
In this article, we’ll highlight pros and cons for each, pointing out things to be mindful of when shopping for your next TEM partner and TEM solution.
3 TEM Solutions for Enterprises
1. On Premises TEM offer Pros and Cons:
a. Pro – Data independence: Your data is on your premises and within your software package that you purchased. You have full control over your data. Again, for companies with very demanding security requirements, this is seen as a huge win.
b. Pro – Internet reliance lessened: With the on-premises option, companies are not as reliant on a functioning internet to connect with their data. This may seem like a minor benefit but with ongoing extreme weather scenarios that continue to become more commonplace because of global climate change, this is a real pro as there is much less susceptibility to a downed internet and any disruption in day-to-day business.
c. Con – More complicated tech support: Because you are not delegating all the responsibilities to your third-party TEM provider, your internal team must assume the slack. And this means greater in-house technological knowledge from your internal team along with more demanding support capabilities. (This may not be an issue for some organizations, but it will challenge many, eventually moving them to opt for hosted solution options.)
d. Con – Software updates and application issue resolution on internal team: Naturally, there will be no routine automated updates from your TEM provider. This means that your internal team will need to address technical issues and IT bugs mostly on their own.
It’s also worth mentioning that many companies that go this route make many custom adjustments to the software they purchased. (And this is fine so long as everything is working properly but as soon as hiccups arise, your internal TEM team will be on their own in resolving these types of technical challenges.)
On Premises Takeaway: This can be an effective way to get started with a TEM solution, especially if your organization has security concerns and wants to start with a more cost-effective option. This option may still make sense for some organizations, but it’s less common today given the advances in technology and more intense knowledge demands of the enterprise expense management industry.
2. Host and Load TEM offer Pros and Cons:
a. Pro – Solution scalability and controlled costs: Your third-party provider can quickly adjust the software to accommodate your organization’s custom needs and do so in the most cost-effective manner. Most TEM providers can tweak their solutions to address the unique needs of each enterprise quickly and inexpensively.
Your organization also benefits from all the learning acquired over time that the TEM provider and technology platform have gained via working with thousands of other enterprises and telecommunications vendors.
b. Pro – Software updates: This is a huge value for your internal team. Your TEM provider can quickly and easily automate all important and necessary updates, which is great. They are best suited to manage this type of task so let them have it; let your internal TEM team address tasks better aligned to them and address more management and program oversight areas.
c. Con – Less accurate inventory & cost allocation capabilities: We have discussed this in many other blogs as well, but an accurate inventory is extremely important if you want to have a strong TEM program. The inventory produced via this solution will be less accurate because your internal team will not be constructing the most comprehensive and detailed billing inventory from all key service records and documentation such as customer service records (CSRs).
Most organizations go the quicker and cheaper route of building inventories primarily from invoice details and this approach is far less comprehensive and accurate.
The more robust inventory solution is one we promote at Tellennium; other TEM providers will offer this as well and this option is found within a more fully managed TEM solution (more info below). We recommend inquiring in detail around this important area when interviewing your next potential TEM provider.
It’s also worth mentioning that this less than perfect inventory makes validating invoicing difficult and makes cost allocation exercises onerous for the finance team.
d. Con – Internal TEM team doing the heavy lifting: Much like the on-premises solution, your team is tasked with doing much of the expense management work on your own. Yes, you will be leveraging the power of the TEM provider technology platform, but your team will still be mired in much of the tough and ugly day-to-day minutiae.
This means you will not also be fully leveraging all the deep domain experience and expertise that your TEM partner can provide. You will also be missing out on their ability to help you adjust quickly on the fly to labor and scalability needs.
Host and Load Takeaway: In our current era of TEM, this solution can help your team significantly and it’s a way to get started in the TEM world, especially if financial constraints are factoring heavily in the buying situation.
It’s not as robust as we recommend with the final option of a fully managed TEM service, but the technology boost that the TEM platform provides will certainly improve the quality of your overall TEM program.
3. Fully Managed TEM Service offer Pros and Cons:
a. Pro – Leveraging powerful TEM technology platform: As noted earlier, leveraging a strong TEM technology platform is important for various reasons.
In our modern era of enterprise expense management, there is simply too many service providers, services, plans, and a myriad of other concerns around “big data” that make leveraging a leading-edge TEM platform a necessity for well-managed TEM programs. (Utilizing homegrown solutions or spreadsheets is not advisable.)
A leading TEM platform in 2022 will also have capabilities to effectively manage other common enterprise vendor charges such as those from the waste management and utilities industries. (Remember, it’s not just telecommunications invoices that expense management teams need to process these days.)
b. Pro – Leveraging deep domain experience and expertise within a TEM: This is where the real power comes in. Yes, the TEM technology is critical in our current era of overwhelming and “big data.” This said, it’s not enough. You also need to leverage the requisite human talent to fully gain all the technology benefits and execute properly around all key and core TEM services.
We point to the fighter jet analogy: The powerful technology is useless without highly trained and seasoned personnel that can maximize the technology to accelerate and maneuver competently at the highest speeds. They must be able to execute on all cylinders around key performance metrics for all key fully managed services such as:
I. Missing invoice review and retrieval support
II. Payment reconciliation exercises
III. Network Audit and Optimization analyses
IV. Inventory maintenance and dispute management support
V. Et cetera… add any additional TEM managed services
c. Con – Greater investment required: It goes without saying that this option will cost a little more in terms of sticker price, but it’s worth it, especially nowadays for larger corporate enterprises with thousands of employees, services, and locations across the country and the world.
A competent TEM provider will provide real subject-matter and industry expertise that your internal team simply will not be able to match. And a strong TEM provider will be able to provide clear assurances that they will be able to deliver real cost-effective value to your organization. (If they can’t, go interview some other TEM providers that can.)
When considering your next TEM, have them outline how they will provide a clear roadmap for TEM success. A good one will be able to spell out what TEM program success means clearly and backup all service delivery objectives within various pieces of the agreement.
This will entail agreement components such as the Service Level Agreement (SLA), which should clearly spell out all key trackable key performance indicators (KPIs) and performance metric objectives around services within scope. Other areas of the contract, applicable addendums or related attachments should also be included to assess TEM performance.
d. Con – TEM providers oversell their capabilities: We have touched on this a great deal in the past as well. In short, there are many TEM providers, especially large high-profile TEM providers that have a propensity to oversell their capabilities.
Some of the highest profile TEM providers in our current market are private equity owned, with the focus being primarily on investor returns over a brief period of time (e.g., 5 years or so). In sum, the priorities for this type of organization are a short-term investor focus vs. a longer-term customer satisfaction orientation. Buyer beware here.
Fully Managed Service Takeaway: In today’s world, this is usually the best option for larger enterprises requiring ongoing expense management support. It’s the era of big data, which necessitates powerful expense management technology.
Moreover, there’s simply too much to know about these days for internal TEM teams to perform all work on their own. Most enterprises with larger volumes of services, employees, and network complexities will want to leverage the experience and expertise of a leading TEM provider.
If you’d like to consider Tellennium in your TEM vendor comparisons, contact us to schedule a brief demo of our solution.
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