The 5 Key Benefits of Applying VaaS Principles to TEM

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Telecom Expense Management (TEM) faces a pivotal moment in the digital transformation era. Historically focused on managing telecommunications operations and controlling costs, TEM is evolving due to rapid technological progress and changing market conditions.  

This shift introduces the innovative concept of Value as a Service (VaaS), made popular by Rob Bernshteyn in his book Value as a Service – Embracing The Coming Disruption. Its integration into TEM is transformative, redefining how telecommunications expenses will be managed moving forward.  

VaaS significantly differs from traditional service models, emphasizing tangible and measurable value delivery. Within TEM, VaaS extends beyond basic service operations and expense management, positioning itself as a strategic tool that aligns with broader enterprise organizational and business goals.  

As enterprises tackle the digital age’s complexities, the merger of VaaS and TEM stands out as a crucial factor for enhanced efficiency, cost-effectiveness, and strategic value in telecom investments for large modern-day enterprises.  

This overview article will explore the intersection of VaaS and TEM, examining how VaaS principles are – and will continue to – reshape the future of telecom expense management.  

We’ll explore the transition into VaaS, highlighting the benefits, challenges, and strategies for effectively incorporating VaaS into TEM practices.  

Let’s quickly review key concepts around telecom expense management and value as a service before diving deeper into how they will work together strongly in the future.

Understanding Telecom Expense Management

Telecom expense management (TEM) is a vital tool for large organizations (e.g., enterprises and government organizations) that rely heavily on communication. It involves managing and optimizing various telecommunications service choices and their associated costs—common examples are voice, data, and wireless services. 

TEM extends beyond bill auditing to encompass inventory management, contract negotiations, policy enforcement, and expense tracking, amongst many other support services. In today’s highly connected and explosive technological world, the role of TEM is more important than ever. 

Telecommunications services are critical for businesses of all sizes, facilitating operations, collaboration, and innovation. It’s essential for large modern-day enterprises (e.g., Fortune 5000 companies). Managing these expenses, however, has always been complex. Traditional TEM methods focused on communications service operations, reducing costs, and correcting billing errors, a small aspect of TEM’s potential strategic business value. 

Today’s telecommunications landscape is rapidly changing, introducing challenges and opportunities for TEM. The growth of mobile devices, the Internet of Things (IoT), and increased reliance on cloud services have transformed business communication and operation methods. These changes call for a TEM approach that surpasses traditional operations and expense management priorities (e.g., focusing on audit savings). 

The limitations of the conventional TEM model are becoming evident in today’s supercharged technological and high-paced worldwide marketplace. Challenges like rigid contract structures, complex global telecommunication tariffs, and fast-paced technological advancements challenge TEM’s narrower scope that existed twenty years ago. (It’s not just about quick audit savings and basic invoice processing.) 

This highlights the need for a more comprehensive, value-driven TEM approach that aligns telecom investments with broader business objectives. Moreover, it does so in a way that can demonstrably prove alignment and value toward the organization’s key overall business objectives. 

While TEM has been essential in effectively managing telecom operations costs, the current highly evolving business and technology landscapes require a reassessment of its role. The future of TEM lies in adopting an even more holistic, value-focused approach, paving the way for the integration of the Value as a Service (VaaS) model.

The Emergence of Value as a Service

Value as a Service (VaaS) represents a significant shift in service delivery, evolving from established models like Software as a Service (SaaS). VaaS goes beyond the traditional product or service-centric approaches, delivering tangible, meaningful outcomes that align with customers’ strategic goals.  

It’s not merely about providing a service (e.g., TEM or MMS) or product (TEM platform such as Tellennium’s MoT), but ensuring these offerings achieve specific, valuable results that all parties agree upon in advance.  

For example, large enterprises that hire TEM providers can clearly outline, monitor, and assess TEM results against top organizational priorities. In short, evaluating success will be made plainer and simpler.  

VaaS arises from the understanding that customers in the digital era continue to expect increasingly more from their communications and other vendor support services (e.g., utilities, waste management); they seek partners who understand and align with their unique business objectives.  

This change leads to transitioning from generic service models to bespoke solutions tailored to individual customer needs. 

VaaS’s core elements include: 

  • Customization: Adapting services to the dynamic needs of customers, offering solutions that add real value to their specific business context. 
  • Agility: Quickly responding to business environment changes, maintaining relevance and competitiveness. 
  • Measurement: Emphasizing value assessment through key performance indicators (KPIs) and metrics aligned with the customer’s goals. (Assessing success is even simpler and more tangible than before.) 
  • Integration: Ensuring services seamlessly blend with the customer’s systems and processes for cohesive functionality. 

VaaS responds to market demands for services that deliver specific, measurable outcomes. In Telecom Expense Management (TEM), this shift is particularly significant. Traditional TEM focuses on expense management and operational efficiency, and it has evolved significantly over the past twenty years. It’s now positioned for even more transformation with VaaS principles.  

TEM is evolving to manage expenses more efficiently and contribute strategically to overall business performance. In this new VaaS-influenced paradigm, TEM transitions from a cost center to a value center.  

Every telecom investment aligns strategically with business outcomes, elevating TEM from what many would consider an operational role to an even more proactive strategic contributor for the organization.

5 Key Benefits of Aligning VaaS Principles to TEM

As noted, integrating Value as a Service (VaaS) principles is revolutionizing Telecom Expense Management (TEM), shifting its focus from mere cost-cutting to more tangible value creation for large enterprises. This evolution in TEM recognizes its effectiveness in reducing expenses and optimizing telecom services while delivering more measurable business value to overall organizational objectives.  

This shift entails a move from traditional cost management to value creation in TEM. Incorporating VaaS means adopting a strategic approach where telecom resources are managed and utilized to foster overall business growth and innovation.  

This approach involves considering how telecom services can boost employee productivity, enhance customer experience, or enable new business capabilities. This perspective transforms TEM into an even more potent strategic asset. 

Modern TEM strategies infused with VaaS elements typically include: 

1. Greater customization opportunities for your organization

Aligning telecom services and expense management practices with the unique needs and objectives of the business will become more evident. 

For example, can your prospective TEM provider easily configure its technology platform to adjust to your organization’s unique needs? This could mean creating highly customized reporting or alerts based on your organization’s needs beyond standard TEM applications. It might also mean tweaking proven processes where necessary to accommodate your organization’s requirements for key over-arching objectives. 

Specifically, custom TEM reporting may also feed into other organizational departments or finance systems so that management can see its impact relative to other important organizational priorities. 

2. Organizational agility is improved

Quickly adapting to changes in the telecom sector, such as emerging technologies or fluctuating usage patterns is enhanced with a VaaS approach. 

For example, a competent TEM provider will fully embrace digital transformation and be completely abreast of the most pressing industry realities. Modern-day reputable TEM providers should know the current industry landscape in detail, be highly vigilant around monitoring the communications network, and be quick to react where necessary.  

TEM priorities will more naturally align with other key organizational priorities in real time as we move forward. 

3. Measurement is enhanced

Evaluating the direct business value generated from telecom investments beyond basic expense tracking will improve markedly. 

For example, many reputable TEM providers nowadays offer a return on investment (ROI) guarantee (e.g., we do this at Tellennium) to demonstrate their genuine position that they will bring positive value to your organization, not simply another corporate expense added to the pile of many.  

Moreover, they will produce clear contractual language and service level agreements (SLAs) that clearly detail the scope of work with key performance metrics (KPIs) of what success looks like for any given project.  

Managing a positive business outcome(s) and evaluating the success of projects should be less subjective and clearer cut. For TEM providers adopting the VaaS approach, their performance will also more clearly be reflected in broader organizational objectives beyond the focused scope of traditional TEM.

4. Integration capabilities will continue to improve

Integrating telecom expense management seamlessly with other business systems for a comprehensive organizational performance overview will become more commonplace. 

Nowadays, it’s the norm for large enterprises to have multiple systems integrations. It’s almost unheard of to do things otherwise. A competent TEM provider will be able to assist in this regard. Systems such as ServiceNow, Salesforce, Oracle, and Workday are examples that a reputable modern TEM program can accommodate and integrate with. 

It’s understood that no one system can do it all, but they need to communicate well with each other towards common and measurable business outcomes. Embracing a VaaS approach with TEM will only make integrations even more seamless in the future and make evaluating broader organizational objectives easier.

5. Enhanced efficiency and strategic alignment are enhanced with VaaS

Integrating Value as a Service (VaaS) into Telecom Expense Management (TEM) revolutionizes how businesses manage their telecom expenses, offering significant efficiency, cost-effectiveness, and strategic alignment benefits.  

VaaS elevates TEM from simple cost control to strategic management of telecom resources, maximizing their value and reducing waste. This shift involves leveraging automation and advanced analytics for deeper insights and data-driven decisions. 

A key advantage of the VaaS approach in TEM is the improvement in vendor management and contract negotiations. Shifting focus from cost to value, businesses can build stronger partnerships with vendors and negotiate contracts more aligned with strategic goals. This can lead to more flexible, value-focused agreements, potentially enhancing service quality and offering more tailored solutions. 

The most impactful benefit of integrating VaaS into TEM is the alignment with broader organizational goals and return on investment (ROI). Telecom expenses are repositioned as strategic investments driving business growth, not just budget line items.  

This approach ensures telecom resources support overall business objectives, like enhancing customer experience, facilitating remote workforces, or advancing digital transformation. VaaS encourages a holistic view of telecom expenses, assessing them for the value they contribute to the organization. 

The tangible benefits of merging VaaS principles with traditional TEM practices are clear. It demonstrates how this merger enhances operational efficiency and cost benefits and aligns telecom expenses with larger strategic goals, thereby improving overall business performance. 

When applying VaaS principles to TEM, companies might employ advanced analytics to assess how variations in telecom usage affect sales or productivity. They might also negotiate telecom contracts to align more closely with their business goals rather than focusing solely on cost minimization. 

By embracing these VaaS elements, businesses can reshape their TEM approach to be a significant driver of business value, transcending its traditional role as a mere cost center.

Overcoming Challenges in Adopting VaaS in TEM

Integrating Value as a Service (VaaS) into Telecom Expense Management (TEM) comes with its challenges, broadly categorized into cultural, technological, and operational obstacles. 

Cultural Challenges: Transitioning from a cost-centric to a value-centric mindset requires a significant cultural shift. Resistance to change is common, particularly in organizations used to traditional TEM practices. Addressing this challenge involves effective communication, education, and demonstrating VaaS’s tangible benefits. 

Technological Challenges: VaaS integration in TEM often necessitates new technologies and systems, posing difficulties, especially for organizations with outdated systems or limited technological adaptability. Key issues include ensuring compatibility, maintaining data security, and achieving seamless integration. 

Operational Challenges: Adapting current processes and workflows for a VaaS approach can be challenging. This involves reevaluating existing practices and potentially developing new skills within the TEM team.

Strategies for Overcoming These Challenges

To effectively integrate VaaS into TEM, organizations can adopt the following strategies: 

Leadership and Stakeholder Engagement: Strong, proactive leadership is essential to drive this change. Leaders should engage stakeholders, clearly communicate the advantages of VaaS, and openly address concerns. 

Training and Skill Development: Equipping staff with the necessary training and skills is crucial for adapting to new systems and processes, ensuring the team can effectively handle a VaaS-based TEM approach. 

Phased Implementation and Pilot Programs: Gradual implementation or conducting pilot programs can ease the transition, allowing for learning, adjustments, and refinements before a full-scale rollout. 

Final Thoughts on Staying Ahead in the Evolving World of TEM

In the fast-changing realm of Telecom Expense Management (TEM), staying ahead requires businesses to be agile, adaptable, and continuously innovative. Embracing Value as a Service (VaaS) principles and being receptive to new technologies is essential.

Companies that successfully align their TEM strategies with measurable business objectives and leverage the latest technologies and insights will be best equipped to excel in the future telecom landscape. 

We hope this introductory article on the VaaS model with TEM is helpful. We’ll write further on this topic and dive deeper into specific examples relating to TEM as we move forward into 2024. 

If you’d like to consider Tellennium in your telecom/technology expense management vendor comparisons, contact us to schedule a brief demo of our solution.   

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