Yes, this topic may seem a bit in the weeds of the technology expense management Woodline for TEM asset lifecycle management, but it’s worth covering. Why? This is because enterprise expense management leaders who are considering how best to shore up their TEM programs benefit from not only the helicopter view of telecom expense management (also referred to as technology expense management these days) but the microscopic and up-close view as well.
The old saying goes, “The devil is in the details.” And such is the case here regarding circuit testing. There are numerous reasons why proper circuit testing for telecom network circuits is important. And we’ll cover the noteworthy reasons in this article.
Before diving too far into the details, it’s helpful to start with the helicopter view regarding this area of telecom expense management, which is just as important in all other areas of TEM. The key operating principles are:
- Is this type of asset or service needed? (In this case, circuits.)
- Is it the right service/asset for our operational needs? (Of similar services, there will be optimal and sub-optimal choices.)
- Are we paying competitive pricing for this needed service/asset, or do we believe we may be overpaying given current market conditions? (TEM optimization exercises may reveal better options.)
- Are we confirming the proper utilization of this service/asset?
TEM Lifecycle Management & Circuit Testing
Within the broader purview of TEM lifecycle management, there are various discipline areas such as (1) asset management, (2) expense management, (3) mobile management, and (4) procurement and ordering support.
At Tellennium, we consider circuit testing within the asset management group of responsibilities; it sits amongst other TEM asset management categories that include wireline helpdesk support, contract management support, inventory discovery & maintenance, and optimization support, all topics that will also be addressed in more detail in subsequent articles for this TEM lifecycle management series.
We mention these related areas to reinforce the idea that total TEM program management is important, hence the term “TEM Lifecycle management.” This said, a well-run TEM program, in total, properly manages all TEM service areas effectively.
It only takes one bad egg to ruin a party, and so is the case here: lack of proper circuit testing can cost large enterprises thousands, if not millions, of dollars over a few years if not taken seriously and therefore worth covering this topic in detail.
The helicopter view of the TEM forest will look fantastic if microscopic attention is given to all areas within a TEM program.
Let’s examine why circuit testing is so important for large enterprises today.
4 Reasons Circuit Testing is Key for Telecom Expense Management
1. Circuit testing ensures organizational awareness of voice and data circuits in use and being billed:
You can’t manage what you are unaware of well. If you are partnered with a reputable TEM provider, they will prioritize the identification and centralization of the management of all circuits within their SaaS technology platform.
It may seem obvious or too simple to mention, but the secret ingredient in most successful endeavors is a dogged pursuit of executing fundamentals, fundamentals, fundamentals. Many might be surprised how many large enterprises have decentralized communications network management.
For example, ACME Corporation may have hundreds of U.S. or worldwide locations. Each location may have different finance personnel attempting to manage and pay for services – including telecom voice and data circuits – on their own, utilizing Excel spreadsheets or limited homegrown technology solutions that do not speak to one another.
This is a big “no-no” violation of our fundamentals-focused mantra. It’s best to have all communications network services or assets in one capable technology platform that serves as one system of record for managing and reporting on these services.
Not having such centralization will almost always lead to various management challenges related to these services. For example, circuits not being utilized according to original intentions may still be billed for months, even years. (There will often be remedies to address, even if still under contract, that optimization analyses will shed light on.)
Sometimes, these circuits may have had disconnect orders issued for them, and the disconnect request was not implemented, usually due to miscommunications between companies. In such cases, circuits can continue to bill for months, even years, if not properly managed. For a large circuit such as a DS3 circuit(s), this could mean thousands, even hundreds of thousands of dollars over a few years, which can become costly quickly.
Moreover, improperly managed circuits may not get paid on time, leading to unwanted late payment fees. In some cases, circuits may not get paid for months, leading to unplanned service interruptions via carrier disconnect(s).
Takeaway: Even if your organization is not leveraging support from a reputable third-party TEM provider, it’s best to centralize your organization’s management for all services if possible; circuits are just one example worth noting. Not doing so will make effective management difficult, and your organization will certainly incur additional charges due to less-than-ideal centralized management.
2. Circuit testing will help verify service quality:
When enterprises pay for communications services, they naturally do so, assuming they work properly and reliably. Even if expense management teams verify that a circuit(s) is billed accurately, the organization does no good if the communications running through the circuit are unreliable and do not meet agreed-upon performance standards.
Oftentimes, expense management leaders focus on the billing aspect of expense management and lose sight of something so basic as service quality. If the service is wanted and needed but does not work as intended, then this is a real problem.
For example, many of our customers at Tellennium are in the healthcare industry. Reliable communications can be critical for this industry and sometimes have life-and-death implications. This is worth mentioning, not to be melodramatic but to make the point that sometimes there is much more at stake than financial concerns or the annoyances of inconvenience. Operations and cost management are both present in well-run enterprise expense management programs.
Takeaway: Circuit testing helps guarantee that your organization is getting what it paid for and that employees have the reliable communications services they need to perform their jobs. Service providers are held accountable according to the terms of their service level agreements (SLA), and your organization’s potential liabilities are reduced.
3. Circuit testing will help verify the service’s security aspects in addition to serviceability:
As with most things these days related to enterprise expense management, security is important. A reputable expense management provider can help identify potential security concerns during circuit testing and work with all relevant internal parties, such as IT, to address them.
Takeaway: In today’s highly connected world, you do not want your organization to be vulnerable to viruses or other security breaches. A security breakdown can cause significant financial damage in addition to causing poor press, which can only exacerbate the problem.
Circuit testing is an initial forcing function that helps large enterprises recognize active circuits, evaluate their serviceability, and check for important security measures compliance.
4. Circuit testing facilitates effective long-term audit and optimization analyses:
We alluded to this in varying ways in the first bullet, but it’s worth going into more detail here. In terms of driving communications network savings when discussing telecom expense management, we often discuss the importance of audit and optimization analyses.
Being organizationally aware of a circuit and testing its service quality achieves those network management aims and sets up the enterprise for other important expense management services such as audit and optimization. Enterprises need to be organizationally aware of all their services and overall lifecycle management to position themselves for effective network audit and optimization reviews properly.
Both services represent different sides of the expense management coin in managing savings opportunities for active services. Audits represent reactive management in verifying purpose and pricing compliance according to agreed-upon contract terms; this is a binary affair.
Is the service billed correctly or not? If not, any errors will need to be documented. The enterprise expense management team will need to work with all relevant carriers to process disputes and recover money owed to the enterprise for overbilling.
Optimization, on the other hand, is more proactive than black-and-white audit analyses. The focus for optimization reviews is not simply on whether valid services are billing correctly per the contract. Optimization efforts focus on whether communications operational needs can be achieved via different, cheaper services.
Or, if satisfied with existing active services, are the rates we are currently paying in line with the current marketplace? If not, can we renegotiate different contract terms or secure more favorable rates with a different carrier(s) at the end of our current contract term?
Oftentimes, an incumbent vendor will proactively renegotiate a contract to keep your organization’s business and preempt competition if your organization can make the case for more competitive pricing. An incumbent vendor may offer discounted pricing in the next contract to compensate for any pricing concerns that existed in the prior contract and keep the business.
Takeaway: It’s important to test circuits so that an enterprise is completely aware of all its circuits and verifies serviceability and security concerns. But beyond these core concerns, doing these things well sets up well-managed TEM programs for other important enterprise expense management functions, such as strong audit and optimization analyses, which are critical for long-term TEM lifecycle management.
Final Thoughts on Circuit Testing & TEM Lifecycle Management
Testing your enterprise’s organization’s circuits is an important fundamental activity for any well-run enterprise expense management program. Circuit testing helps identify all circuits actively used for centralized management and entails testing for serviceability and security, both core aspects of this process.
Moreover, it sets up strong TEM programs for full TEM lifecycle management, leading into other important service support areas such as audit and optimization analyses, two support areas key to driving savings for active enterprise communications services.
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