Expense management leaders (e.g., CFOs, Directors, and Managers) for larger enterprises are asking this question more nowadays. And for good reason. There is increased pressure on organizations to serve energy needs more effectively. Utility costs are rising, and environmental and regulatory pressures are also increasing.
This is occurring while modern workforce dynamics are more uncertain than has been the case in recent memory. For example, everyone is aware at this point how the labor pool has been reevaluating and renegotiating the terms of the relationship with traditional corporate culture and management. This points to a scalability challenge:
How do we get the right amount of the right talent to manage our universe of utility expenses effectively and sustainably over the long term?
This article will explore utility expense management’s focus in more detail. We will also examine how you – as an expense management manager – can think of ways best to mitigate the challenges of modern-day utility expense management and serve your organization most effectively.
What Exactly is Utility Expense Management?
Utility expense managementhttps://tellennium.com/utility-expense-management/ is the discipline of implementing a purposeful and programmatic approach to comprehensively managing an organization’s utility expenses. It’s focused on a few central tenets:
- What utility services are available to our organization that best serve our needs?
- How do we procure these services at the most competitive rates?
- How do we best manage our utility services to avoid unneeded overconsumption and waste while maintaining tight control over ongoing utility management operations?
The bottom line is that it’s about the right utility services at the right costs, managed effectively now and sustainably into the future.
Reputable utility expense management vendors will provide a technology platform that is often SaaS-based to house and manage data, along with a wide array of supporting services to serve program operations and cost management goals.
It’s a partnership that leverages the technology and expertise of the utility expense management provider. Some expense management providers only manage utility expenses, while some traditional TEM providers, such as Tellennium, offer utility expense management services in addition to TEM and MMS expense management offerings.
Utility Expense Management and its Closely Related Cousins
Once distilled to its fundamental essence, it becomes easy to see the similarities between this focus and the like-minded focus of traditional telecom/technology expense management (TEM) and managed mobility services (MMS). These similarly situated enterprise disciplines embrace the same mindset to address the expense management challenges within their respective domains.
It’s worth noting these similarities because most larger enterprises are wrestling with managing at least one of these expense management areas, if not all. More likely than not, this will resonate with many readers of this article. If so, much of which will be covered here is transferable, at least in general terms.
Many particulars within each domain will differ, but the overarching concepts and mindset needed to deal with these expense management challenges are the same and worth being cognizant of.
What Organizations Benefit From Utility Expense Management?
Large enterprises will most benefit from this service. In this case, large enterprises are defined as those that manage at least $50k in monthly utility charges and have multiple locations utilizing utility services throughout the country or world.
For larger enterprises, utility expenditures will often approximate around ten times the monthly spend for traditional telecom expenses. This is another reason the utility expense management service has gained popularity over the last ten years; now that greater capabilities exist to manage these areas like other expense management arenas noted above (e.g., TEM and MMS), enterprises have moved this up on the list of management priorities.
Additionally, a much larger number of invoices tends to inhabit the utility world than the telecom world, which adds to the need for more stringent management for organizations seeking to button up their utility expense management program.
Companies with sufficient size can scale their efforts more effectively by partnering with outside 3rd-party utility expense management expertise, and, as such, return on investment expectations will almost always be satisfied via a reputable program.
Managing utilities smartly is essential for all businesses – even small “mom and pop” businesses – but companies that will benefit most from 3rd-party utility expense management support are companies that meet this basic threshold in size ($50k monthly spend) and complexity (e.g., large number of locations and invoices).
Utility Expense Management – Technology & Services Value
A robust technology platform to manage data is foundational to a strong program: All the data related to utility services and corresponding charges must be housed within an application powerful enough to accommodate this data.
A robust technology platform will also be highly configurable to adjust to your organization’s needs, i.e., it may have automated workflows customized for processes designed to your organization’s requirements.
It will also provide insightful dashboard capabilities to monitor usage consumption and trending, along with all pertinent charge and billing information in a wide array of reporting; custom dashboard design and reporting capabilities will also be available.
A foundational aspect of all modern-day expense management providers – utility, TEM, MMS – is providing a robust SaaS that all support services leverage in corresponding analytical work provided by subject-matter experts in each area. This is a vital area to delve deeply into within discovery sessions with any utility expense management provider you are considering.
Different platforms will all have pros and cons. But be sure you are satisfied with the critical considerations noted here; life’s too short to go about expense management without a top-of-the-line technology platform.
Utility bill management is a weight-bearing core service for UEM: This support area is sometimes confused with utility expense management, but it is narrower in its service focus. It is a subset of UEM. Utility bill management focuses on the key activities relating to bill processing and on-time payments, initial bill verification and dispute resolution support, and supporting cost allocations to relevant business units.
Although bill management activities will also help to serve more comprehensive utility expense management needs such as usage monitoring or help inform strategies to save money over the long term, its primary objective is accounts payable centered and highly focused on paying bills on time and avoiding late fees and unwanted service disruptions.
A related article, What’s the Difference Between Utility Expense Management and Utility Bill Management, discusses the value of eight specific support areas within utility expense management in much greater detail.
For present purposes, we’ll give an overview of areas in utility expense management that can provide genuine benefit to your organization in terms of helping to manage your organization’s utility services comprehensively.
As noted earlier, utility expense management is centered on implementing a purposeful and programmatic approach to managing an organization’s utility expenses in total. This contains many support areas, including utility bill management.
14 Benefits of a Utility Expense Management Program
Closing Thoughts on Utility Expense Management
Utility expense management is a comprehensive endeavor. Utility bill management is a key service on offer within this service. Procuring the right utility services at competitive costs is where it starts.
After that, it’s about leveraging the right technology platform, best practices, and skilled expertise that a reputable utility expense management partner provides to manage ongoing service operations and costs vigilantly and in an ongoing manner.
If you’d like to consider Tellennium in your utility expense management vendor comparisons, contact us to schedule a brief demo of our solution.
The author, Rob Halik, is a Senior Analyst at Tellennium, specializing in Managed Mobility Services, Telecom Expense Management, and Utility Bill Management. With over 25 years of industry experience, Rob offers enterprise expense management insights to help businesses streamline operations and reduce costs. This article is a collaborative effort by Tellennium’s expert team members, including Greg McIntyre, Shawn Veitz, Matt McIntyre, and Todd Givens, who together bring over 100 years of industry experience to the table.
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