Telecom expense management is the process of managing an organization’s telecom expenses. TEM can also entail mobility and similar type expenses. Below we answer the most common TEM related questions we receive.
1. What is Telecom Expense Management (TEM)?
Telecom Expense Management (or Technology Expense Management) is the management of complex Enterprise telecom-related expenses; a digital transformation of the accounts payable (AP) process, monitoring and reporting of billing charges, contracts, changes, and services’ inventory.
Most enterprises partner with a TEM firm, which will have its own specialized technology platform and often a team of subject-matter-experts who help them more efficiently manage their expenses.
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2. How much do TEM services cost?
TEM firms charge in diverse ways. The most common is based on a percentage of monthly spend processed for wireline services.
For wireless services, charges are based on a monthly flat rate per device, device type, and support services desired for mobility. Based on the level of spend or quantity of devices, more costs less. Commonly, the range is from 1% to 5% and $1 to $7 per device. Some TEM firms offer cost neutral guarantees.
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3. How much can TEM services save?
Each organization is different so it will depend. Organizations can expect to receive multiple streams of savings from audit and optimization initiatives. TEM analysts state an average 8-10% of spend.
However, the efficiency and productivity gains from the digital transformation of inclusive processes can be equally significant. Some TEMs claim 25%+ in savings and offer cost neutral guarantees.
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4. What type of companies use TEM services?
All types of organizations, including the government, can benefit from TEM services. The main qualification is Enterprise expense complexity which is typically associated with multiple locations and a minimum monthly telecom-related spend of $50,000.
Typically, the monthly spend is much higher and if applicable, mobile device counts are greater than 500 devices. The larger, the more complex, and the more fluctuations taking place within an organization, the greater the benefit in managing changes, acquisitions and disposition adjustments.
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5. What is the difference between TEM Telecom Expense Management and Technology Expense Management?
The acronym TEM originally denoted Telecom Expense Management. More recently, the term changed to Technology Expense Management for two reasons: To eliminate the legacy negativity of the word telecom and allow the expansion of the term expense management to include cloud services and other technology expenses.
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6. Why outsource to a TEM company?
The alternative is to use spreadsheets, access databases, and manual processes which in a complex Enterprise, is nearly impossible to efficiently track, monitor, and audit enterprise expenses.
TEM companies have technologies and proven processes designed specifically to address Enterprise expense challenges. Many also have a greater breadth of knowledge due to their diverse customer base and dealing with all telecommunications vendors.
7. How do I pick the best TEM for my company?
When evaluating TEM providers, you will want to consider the following: (1) Customer satisfaction (2) International and Domestic requirements, (3) Location of Support and Servers, (4) Inventory Build Practices, (5) Ease of use and capability of the technology platform, and (6) Willingness and culture of the TEM provider as they should be a long-term partner you’ll be working with.
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