This is an important question to consider when vetting telecom/technology expense management (TEM) options for your organization. In this article, we define centralized management as management oversight from one centralized authority, which utilizes one primary technology platform to facilitate the most efficient processing and reporting of data to the overseeing of the enterprise expense management team.
By contrast, decentralized management disseminates management across locations, managers, and platforms. It’s more of a bottom-up approach. It does work in different business models or industries (e.g., the fast-food industry) but we don’t believe it’s best in the TEM world.
Centralized Management & TEM
Centralized management is a top-down approach, managing the organization’s communications network and expenses taken together as opposed to leaving disparate internal locations and teams to attempt to manage this on their own. This is the approach we recommend within the world of TEM; there is simply far more visibility and control this way.
Concerning the TEM industry, the overseeing management team is usually comprised of internal expense management leadership, such as the Director of Telecommunications and his or her C-level management (e.g., VP of Network Operations, CFO).
This internal team, in our view, is best supported in its enterprise expense management efforts by partnering with a competent TEM provider. The TEM provider will provide its specialized TEM technology platform and expense management expertise to best position your organization for current TEM industry demands and requirements.
The TEM partner will function as an extension of your internal team. And a competent TEM partner will set up your organization to scale over the long term, as your organization grows, and network expense management needs evolve.
As mentioned, we believe the centralized management approach works best for large enterprises in the world of telecom expense management. Below we unpack how a competent TEM partner can help in this regard:
4 Reasons for Centralized TEM
1. Increase your TEM spend control
We are all familiar with the old saying, “One hand doesn’t know what the other is doing.” This certainly resonates in the world of TEM. Many large enterprises have hundreds, even thousands of locations in some instances. And many international companies have locations widely spread throughout the world.
Consider one of the basic activities of a TEM program, which involves the processing of vendor invoicing. If company X has locations throughout the country or world, there will typically be hundreds of vendor invoices relating to utilities, waste management, and telecommunications services.
All these invoices will need to be processed in a timely and effective manner to avoid late payment fees or other common TEM problems such as disconnect for non-payment of services.
Centralized management via one TEM technology platform and one focused accounts-payable team is the right answer here. Just imagine multiple locations managing AP in a piecemealed fashion, each with its own practices and levels of competence. It would create chaos and confusion at best.
You get the idea: Too many cooks in the kitchen almost never works out well for anyone, especially for larger enterprises (e.g., Fortune 500 companies). Beyond the always pressing need to realize enterprise communications network savings, this is one of the most common drivers for enterprises seeking TEM services.
This is so because most enterprises become overwhelmed. There are simply too many people across too many disparate intracompany teams to process all invoicing properly and in a way that avoids late fees and undesired service disconnects.
TEM spend control takeaway: A competent TEM provider will address these common TEM issues via one strong TEM technology platform, a highly seasoned team of subject matter experts dedicated to certain tasks such as invoice processing, and proven TEM industry processes and best practices.
Moreover, this team will be able to show proactive savings. They will prevent these common TEM problems in the first place. You might think of this as “hidden TEM ROI,” which strong TEM programs deliver on.
2. Increase your TEM spend visibility via one platform
We alluded to this in the previous bullet; control is key in the TEM world. And you can’t have tight control over your expense management program without clearly seeing all that is going on. And how do you get control?
You do this with one strong TEM platform. One strong technology platform will allow your organization to house and manipulate all vendor data within one system. Moreover, this system should facilitate reporting that is highly transparent.
This, in turn, empowers a highly specialized TEM team to perform all its key tasks in an efficient and effective manner, which will help avoid late payment fees and unwanted service disconnects for this example.
“You can’t manage what you can’t measure.” This is another phrase that rings true for the world of TEM.
TEM visibility and one platform takeaway: A competent TEM provider will leverage a powerful and current TEM platform to facilitate and expedite all TEM tasks in addition to assisting with prompt and accurate payments to applicable vendors.
Some larger TEM providers will have multiple legacy platforms they also need to service and/or address in some fashion resulting from merger and acquisition (M&A) activities.
The better TEM providers should be working hard to migrate all customers to their leading and primary TEM platform. (Having to utilize multiple disparate legacy technology platforms gets ugly quickly; this almost never ends well in terms of TEM service delivery, especially for expense management customers.)
3. Increase your TEM best practices and organizational effectiveness
Especially for large and sprawling enterprises, strong adherence to current TEM industry best practices is key to highly effective expense management.
You will benefit tremendously from centralized TEM management enabled by your TEM partner—a team of dedicated TEM specialists will have its hands on the current pulse of vendor services and practices and be best positioned to manage all current industry challenges. They will know them better than your internal team (e.g., new FCC regulations impacting tax charges for telecom invoicing).
These benefits will involve a myriad of things such as: (1) Knowledge on how to best handle disputes with certain TEM vendors, (2) knowledge of TEM vendor services and each’s common billing practices, and (3) knowledge of how to best organize the entire TEM team to collaborate with one another effectively.
TEM best practices and system-data takeaway: Regarding the TEM platform, tangential personnel to certain TEM activities may have system access and visibility to effectively collaborate with the entire team as per the requirements of their role, but all users will only be granted appropriate systems data edit rights as per the need for their role. (By design, this reduces unnecessary errors and duplication of effort.)
From a management point of view, your TEM partner will guide the entire team more effectively relative to TEM best practices for services within scope, reducing unnecessary waste.
4. Increase your TEM organizational savings and accountability
As mentioned, everyone wants to capture savings as quickly as possible, and this is especially true for the TEM industry. This said, the best TEM programs will save their enterprise partners substantial amounts of money, thousands – even millions in most cases for larger enterprises – primarily by avoiding common TEM problems such as late payment fees and unwanted disconnect charges in the first place.
When evaluating your first or next TEM partner, spend time asking them about how they typically deliver TEM savings and have them demonstrate TEM program ROI. Ask where savings most often come from and get clear on what you and your team can expect from them throughout the lifetime of your agreement.
TEM savings and accountability takeaway: You will want to make sure that all key performance metrics relative to services within scope are clearly laid out within the service level agreement (SLA) and all other pieces of the contract (e.g., applicable addendums, schedules, appendixes) before signing on with any new TEM.
Remember: A strong TEM that you will want to partner with will have no problems clearly outlining how they will be able to:
(1) Deliver strong TEM program value.
(2) Back up all claims by committing to supporting contractual language.
(3) Indicate how any performance challenges will be dealt with, including a potential option for the customer to leave the agreement at any time if dissatisfied with TEM performance. (Some providers permit customers to leave at any time if they so choose. Most TEM providers do not allow this, so be careful to inquire about this area when considering your next TEM partner.)
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