For enterprise communications network operations and financial management teams, selecting a telecom expense management (TEM) provider to partner with is the single biggest decision that they will make relative to optimizing their organization’s communication network for the right services at the right costs over the upcoming years.
The right TEM partner will bring an advanced modern day expense management technology platform to the table along with a team of highly experienced subject-matter-experts to perform the required support services to manage the enterprise communications network effectively.
Let’s consider some of the critical areas for evaluating a telecom expense management partner.
Telecom Expense Management Partner – 4 Key TEM Areas
1. Level of Service
When evaluating a TEM partner, you will want a partner with a strong expense management technology platform and a fully managed service. Some TEM providers will offer “host and load” only TEM platforms and highlight the automation capabilities as a main selling point.
Put plainly, a sound TEM platform along with a fully managed TEM service is the situation enterprises should pursue. It facilitates a streamlined expense management program that performs key TEM functions beyond basic automation, which is important but not quite enough. Expense management teams will also want strong audit / optimization support, along with expert dispute management talent that can help drive issue resolutions and expedite the realization of savings.
Moreover, a fully managed expense management service will also provide high-touch management for inventory maintenance and moves, adds, changes, deletes (MACD) management.
2. Customer to Employee Ratio
This is another important item to consider when evaluating TEM providers. Most of the largest and “leading” TEM providers – as they like to refer to themselves – have thousands of customers. Most of these “leading” TEM providers are owned by private equity firms. They have a very large number of customers because they must drive accelerating profits within unrealistic timeframes.
They must do this because this is how they play their game; this is how they avail themselves the return- on-investment (ROI) ratios that their corporate boards and shareholders demand. By the time their dissatisfied expense management customers have decided that they have had enough poor service and unmet service level agreements, they are off to another merger and a newly formed company. It’s now a “fresh start” and “another organization’s problem.” Welcome to the modern-day telecom expense management industry, which is dominated by private equity ownership at the top of the industry food chain in terms of TEM provider size.
This is analogous to the parent evaluating whether it makes sense to take their child out of a large school and send them to a smaller school – even if it’s private and costs more – because they know that their child will be much better served and supported by, say, a 1 to 30 ratio than 1 to 100+.
In terms of the TEM industry, the ratio differences between a TEM firm and number of customers can be enormous when comparing one of the larger private-equity-owned firms with one of the smaller independently owned ones. For example, 1:75 for a smaller firm versus 1:5,000 for one of the larger TEM firms would not be an exaggeration.
This is very important. Ask penetrating questions with respect to this area from the TEM provider you are evaluating.
3. Support Team Location(s)
This is another important area that we have mentioned in other TEM provider blogs, you simply will not get the highest quality of service from TEM providers that have most of their support staff oversees in places such as China or India.
As previously noted, it’s understandable why this practice is performed: it’s much cheaper for large private-equity-owned TEM firms and their shareholders. However, the drop in quality of service and the security concerns related to data transfer realities puts into question the long-term value of such a move.
It sounds basic, yet this is an area that most of the larger expense management firms will gloss over when making their pitch to potential enterprise expense management clients. And they seem to easily move past this troublesome area because they work off a natural bias that works in their favor during the Sales process.
What’s the bias? And why does it exist? The essence of the bias goes something like this: “This is larger TEM provider and therefore they must be good, otherwise they would not be one of the larger and ‘leading’ expense management providers. This serves a sort of indicator of trustworthiness; I feel this is a safer choice for myself and my organization. I can justify this decision to my management and organizational peers easier and therefore can feel that I am doing the right thing.”
This type of psychology is understandable for various reasons, most notably because we are biologically wired to think this way because it served us well in our evolutionary past. For example, if you were going to collaborate with another tribe, your chances of survival would likely be enhanced if you chose to associate with the larger and more powerful tribe.
Nowadays, this reality no longer holds water, especially within the business world and – in this case – the modern-day TEM industry. Bigger may be better for private equity firm shareholders, but this does not translate to “better” for enterprise expense management customers.
When evaluating your next potential TEM partner, ask them plainly where most of their support staff are located. This will tell you a great deal about their business priorities. Are you, the customer, the priority? If so, the bulk of support staff will be located within the U.S. because this will provide the best level of support for US-based companies.
For example, TEM support staff located in a time zone that is 12 hours ahead of US East coast time naturally presents a challenge for internal company communications. Language barriers also exist when utilizing labor in non-English speaking countries.
4. Inventory Build Practices
We have multiple blogs cited in the links below on the importance of a comprehensive, highly granular, and accurate inventory. This truly is the foundation of a genuinely strong TEM program.
If, like so many of the large and “leading” TEM providers, the inventory is primarily built from billing data rather than customer service records (CSRs) and other service detail documentation, the overall enterprise expense management program will suffer. If there is no testing of circuits within the inventory by the TEM provider, then this is a sign that their inventory management is sub-par.
It’s no different than building a house on a shaky foundation. It’s only a matter of time before bad things happen. Please see our articles: Top 3 IT Network Inventory Management Priorities and 4 Key Benefits of an Accurate Expense Management Inventory for more information on why we believe inventory management is a critical TEM priority for a strong expense management program.
The importance of a sound inventory cannot be overstated when discussing the vitality of a modern-day enterprise expense management program. A comprehensive and clean inventory enables accurate network audits and optimization exercises, it facilitates insightful benchmark analyses, and empowers MACD decision-making
To reiterate, the single biggest decision that enterprise expense management teams will make relative to optimizing their organization’s communication network for the right services at the right costs over the upcoming years is choosing the right TEM partner.
Whether evaluating your existing TEM provider or evaluating TEM providers for the first time, please keep these four expense management areas of consideration top-of-mind in your thinking and you will be well-served.
To learn more about our TEM program at Tellennium, please schedule a brief demo of our solution.
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