What is the difference between Telecom Expense Management and Technology Expense Management?

Telecom Expense Management vs Technology Expense Management

Technology Expense Management is the new-school version of old-school Telecom Expense Management. It’s TEM 2.0. This is the simplest way to understand the evolution of the term. And gaining greater understanding for how the term has expanded over time can help enterprises more effectively manage most of their technology expenses beyond traditional telephony services.  

The term TEM originally focused on enterprise telephony services and closely related communications network operations and expenses. 

As technology has continued to evolve over the last 25+ years, so too has the need to expand the scope of the enterprise expense management discipline traditionally referred to as TEM. The need to include more information technology (IT) assets and services beyond traditional telephony communications has become evident. 

Over time, it became clear that these other IT assets and services could benefit from the same type of expense management best practices that were employed around more traditional telephony services. 

Gartner currently defines Telecom Expense Management Services as:

Telecom expense management (TEM) services provide enterprises’ IT, procurement and finance departments with the ability to order, provision, support and manage costs of large-scale corporate communications and associated IT services with their inventories (such as fixed and mobile telephony and data, cloud license tracking and emerging IoT connectivity). In addition, they provide tools required for C-level technology strategic decision making. Gartner’s TEM coverage focuses on SaaS-based applications/platforms, managed services and associated professional services.

 In this blog, we’ll highlight differences between past and present TEM definitions and identify examples to help illustrate the evolution of the discipline and the ramifications for organizations today.  

The now expanded definition more broadly replaces Telecom with Technology and for good reason. 

4 Key Differences: New TEM & Old TEM

1. IT Software | Application | Licensing Explosion

Technology development continues to advance at an exponential pace. This trend has facilitated a migration to Software as a Service (SaaS) solution offerings throughout the enterprise world.

The recent pandemic helped to accelerate more expansive views of what’s possible relative to the nexus between work and technology and encouraged a more flexible world view. Remote work became the norm rather than the exception. Thus, further contributing to the demand for ever-evolving SaaS based technology offerings.

TEM, which could often be deployed either on an on-premises basis or cloud-based (SaaS) offering is mostly now deployed as a SaaS offering.

This technology trend makes upgrading and reconfiguring software to accommodate other enterprise IT expense management assets and services more doable with respect to expense management efforts.

And the proliferation of additional IT technologies and enterprise licensing has necessitated the corresponding need to manage these assets and/or services in the same vein as traditional telephony products.

2. IT Technology Speed Advances

As technology products and services continue to advance at a high rate, the desire to use them in settings beyond a traditional in-office environment has also ballooned.

The advances in internet connectivity and speed capabilities have facilitated the ever-growing trend toward SaaS cloud offerings since the mid to late 1990s. (Think 5G here.)

As noted, it is much easier to reconfigure a SaaS technology platform to support other enterprise communications expenses that reach beyond traditional wireline services. This is the continuing trend to unified communications, otherwise known as Unified Communications as a Service (UCaaS).

It’s also easier to perform remote software updates that are now needed for an ever-growing and expansive array of enterprise communications expenses that also need to be managed like traditional TEM wireline services.

Prior to COVID, technology had been rapidly growing in every way and the trend towards SaaS solutions was already clear. The recent pandemic simply placed a booster-rocket on the trend towards cloud-based solutions and remote work.

It is now clear that work can be productively completed from home offices and that older conventional arguments from longstanding executives that all employees need to be in the office 100% of the time to be effective is inaccurate, even if well-intended

3. Mobility Services Demand

Again, no surprise that there’s no end in sight for the proliferation of mobile devices and mobile services provided by the various telecommunications carriers.

With mobility services, there is also a real need to prioritize comprehensive device lifecycle management, more than, say, traditional TEM, which focuses on the monitoring of billing activities.

These mobile services and corresponding billing components also need expense management support, like their older fixed or wireline services counterparts. And the SaaS technology platform facilitates easier management of all types of expenses for the enterprise.

It’s both the soaring increase in technological capabilities (e.g., 5G) and the equally voracious appetite of consumers / employees to use these new devices and services that continues to drive the need for TEM support beyond traditional wireline services.

4. Utilities & Other Enterprise Services

As the TEM industry has evolved over the past 25 years, it’s become clear that other enterprise vendor services can be managed in the same way that traditional TEM has been managed. 

Utilities and waste management services are fitting examples of how the TEM industry naturally evolved and expanded to include other services that can be managed more effectively under the same methodologies and processes used in traditional TEM support.  

Because the traditional TEM technology platform could be easily upgraded to accommodate additional billing services such as, say, utilities, the door was left wide-open for other enterprise IT services to be managed under a similar TEM approach.

Conclusion

The updated version of TEM is simply traditional TEM (telephony focus) with more capabilities to manage other types of enterprise expenses, utilities and waste management expenses being notable examples of the expansion of scope under the TEM umbrella. 

The new TEM or Technology Expense Management is the 21st century version of Telecom Expense Management.  

As technologies continue to evolve at exponential rates, as mobility demand continues to soar, and as unexpected social forces continue to strain the workforce, the demand for Technology Expense Management services and support will also correspondingly increase.

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