For most larger modern-day enterprises, we believe the answer is yes. This article will highlight why we think this is the case. We’ll compare the management of utility expenses to two other high-profile areas within the expense management world: TEM and MMS.
It’s worth noting that they are all worth comparing because they share similar challenges. Still, neither needs to be paired with the others, i.e., some organizations may have more significant challenges in one area over others and, therefore, only employ 3rd-party support for one or two of these areas. In contrast, others leverage outside help for all these areas.
Many enterprise expense management directors and managers are accustomed to utilizing powerful technology platforms to help their teams process and analyze voluminous enterprise data. This is true throughout the expense management world, whether related to traditional telecom expense management (TEM) or managed mobility services (MMS), which is more popular than ever due to the proliferation of mobility services over the past fifteen years.
Telecom expense management providers – also presently known as technology expense management providers – manage complex enterprise telecom and IT-related expenses. The discipline focuses on procuring and utilizing the right services for an enterprise’s communications network at the most competitive costs.
Managed mobility services are a comprehensive suite of services provided by third-party expense management providers to manage a company’s mobile devices and related services. MMS includes procurement, deployment, management, and support for mobile devices such as smartphones, tablets, laptops, and other wireless-enabled devices. It also focuses on selecting the right services for the enterprise at the most competitive costs.
Where traditional TEM focused primarily on comprehensively managing fixed telecom communications services, i.e., offering a full suite of services and a technology platform, MMS evolved to fill the same comprehensive operational management and cost focus, only around enterprise mobile services. It also leverages a robust technology platform and a full suite of managed mobility services to help support enterprises with this expense management need.
Traditional TEM started circa the mid-1990s, and MMS entered the fray circa the early 2000s.
Where does Utility Expense Management Fit In?
Utility expense management is gaining popularity. It is focused on effectively managing an enterprise’s utility needs from both an operational and cost management perspective. Like TEM and MMS, it seeks to optimize the selection of vendors and services most cost-effectively.
It became more commonplace around eleven years ago. Utility expense management has become more popular recently for multiple reasons: Utility costs continue to rise, regulatory pressures are increasing, and technology platforms continue to evolve, enabling more effective management of all an enterprise’s expenses.
Enterprise expense management decision-makers realized utility expenses could be managed like TEM and MMS. Moreover, they realized that many enterprises have as much as 10x in utility expenses than telecom expenses and could also serve this need.
Again, the two core concerns are the same:
It is the newest kid within the enterprise expense management arena. It fits right in because it brings the same challenges to enterprise expense management teams that TEM and MMS bring; there is “big data” to contend with and many moving parts, i.e., vendors, services, plans, etc., that can make ongoing management challenging.
It has unique aspects, like rising cost challenges and more significant regulatory pressures. Still, it has far more in common with traditional TEM and MMS and, therefore, requires a similar management approach as traditional TEM and MMS.
Whether speaking of TEM, MMS, or Utility Expense Management, each needs a proactive and programmatic management approach to avoid costly errors and operational inefficiencies. This approach is best when leveraging:
How is Utility Expense Management Different than TEM or MMS?
At a high level, one of the differentiators has already been noted; it’s just the latest sector of services that modern-day enterprises realize the need to manage more proactively – like TEM and MMS – to ensure proper business operations at competitive costs.
Because similar business complexities exist for utilities also present in TEM and MMS, i.e., multiple vendors, different services, various plans, voluminous invoicing, and myriad technological challenges, the expense management industry has also evolved to address this need.
In a future article, we’ll dive deeper into some main differences between utility expense management, TEM, and MMS. But one key differentiator worth noting now is that there tends to be even more pressure on enterprises to comply with government-mandated regulations within the utility industry.
This is at least partially a result of environmental concerns and rising energy costs, which has rightly made enterprises stand up and take notice of its increased importance within the expense management arena.
Let’s now take a more detailed look at five reasons that a robust technology platform is also required for utility expense management.
5 Reasons Why Utility Expense Management Needs a Technology Platform
1. A robust centralized database is needed to house and parse vast amounts of utility data
Utility services and their invoicing come with all the same challenges and needs that accompany traditional fixed telecom or mobile services. It, therefore, requires a robust database that can handle and manage all data similarly.
It’s essential to get all detailed information related to services, assets, and invoicing within the system for all relevant analyses, whether related to comparing inventory data to invoicing charges or reviewing pertinent corresponding vendor contractual information.
For example, a strong technology platform will enable exceptional inventory management, which is especially important to invoice auditing (e.g., highly detailed data to the most granular levels compared to invoice charges) and storing contractual information critical to the utility lifecycle management process. Examples include:
A powerful expense management platform is necessary nowadays, especially for larger enterprises with a vast array of vendors, services, and plans. Attempting to perform this type of work in the old ways of spreadsheets or homegrown systems will not be as effective.
2. A highly configurable platform allows for highly customized workflow automation
Each organization will have its requirements and priorities for establishing rules relative to various aspects of the expense management process. Many of these rules can be automated via workflows and streamlined by the technology platform of the TEM/MMS provider.
Managing the accounts payable process is one such common need. At Tellennium, for example, the process and technology employed allow the automated collection, imaging, and use of OCR technology to manage and process invoicing and all general ledger (GL) coding and allocations.
Automated invoice audits and variance reviews are related to this process. They ensure the customer is not overcharged for services. Customized accounting files will also be generated to facilitate vendor payments and reconciliations.
This adds tremendous value, especially concerning the finance and accounts payable arena. We believe 95% of the workload can be automated away relative to finance and invoice management activities.
3. A robust platform will support critical inventory and asset management tracking
Inventory is so important to a well-run expense management program. The same is valid for performing this work for utility vendors.
A comprehensive approach to data management and reconciling inventory data to invoice data cannot be overstated.
Specifically, upon obtaining initial invoicing, letters of authorization, and online portal access, the inventory can be built. A proper TEM/MMS/Utility expense management platform will have an inventory queue that can provide flagging when an account needs to be inventoried, and this should be true whether the account is new or if services have been added to an already existing account.
Different expense management providers may do this differently. At Tellennium, we contact all vendors to obtain all pertinent inventory information. For example, customer service records (CSRs) are sought (e.g., key for a strong inventory), as well as any reporting that is available online; we’ll also contact vendors to verify all data sources related to services and invoicing.
The next step is identifying services, service types, features, and physical addresses. And for services amenable to testing, the testing of services will be performed to determine a few things.
Naturally, the particulars related to traditional fixed telecom services or mobile devices will differ from some of the characteristics of utility services. Nonetheless, the universal approach is the same, and expense management vendors at the vanguard of the industry today are performing the same types of analyses.
4. A platform with a highly detailed dashboard and reporting capabilities provides powerful visibility
That which can be seen can be measured, and that which is measured can be managed well. A reputable expense management provider with a robust technology platform should be able to provide highly detailed dashboarding capabilities and excellent reporting for all areas within the utility expense management lifecycle.
All reporting should be available in real time, with reports having the ability to generate weekly, monthly, quarterly, and yearly insights as desired. At Tellennium, for example, we will provide each customer with dashboarding that includes customized reporting “widgets.”
These widgets can be automatically emailed to the user daily, weekly, monthly, or quarterly, so the user does not necessarily need to log in to the system/platform to obtain specific desired reports. They are also available within the system for review at any time.
Such detailed dashboard capabilities and reporting provide strong support and structure to all scheduled monthly, quarterly, and annual business reviews.
5. A powerful platform will support team communications via alerts and email functionality
This overlaps and is related to the dashboard and reporting bullet outlined above. A strong system will also be able to employ automation in team communications.
A present-day expense management platform will excel at sending automated alerts or email notifications as per your organization’s desired needs.
Closing Thoughts on Utility Expense Management and Technology Platforms
You need robust technology, strong processes, and experienced and skilled personnel to do expense management well. It does not matter whether the expense management work is being performed for traditional telephony services, mobile devices, or utilities.
Discuss the technology and approach with your prospective TEM/MMS/Utility expense management provider in your next discovery process. Powerful technology is a great place to start and relate to each area of their process, so keep this in mind during discussions.
If you’d like to consider Tellennium in your utility expense management vendor comparisons, contact us to schedule a brief demo of our solution.
Call now for a no-cost or obligation demo.
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