What promises did your high-profile TEM break?

Moving on from a TEM partner is common within the Telecom Expense Management industry. It is common because far too often, TEM providers fall short on the commitments they make to their clients. They fail because of the highly competitive nature of the market and various pressures on profit margins.

Let us consider some of the factors below which are often created by Merger & Acquisition activity.

Dispute & Optimization Projections

As a result of industry consolidation, many large TEM providers are owned by firms with ownership that is highly focused on short-term profits due to their shareholder-centric business model. Because these companies are usually looking to sell within 3 to 5 years, they prioritize the management of their short-term costs at the expense of long-term client satisfaction.

This, unfortunately, generates many promises in the sales cycle which are usually too big to be kept. For example, “We’ll be able to save X amount via dispute and optimization analyses.”

This is a good example of something that will be promised during the sales cycle even though the highly experienced internal talent needed for such work has been eliminated or replaced with far cheaper labor and therefore projected savings fall way short of the mark.

Offshored Support

Again, the focus on the elimination of talent and/or replacement with cheaper labor is a direct reflection of prioritization of short-term profits and returns to shareholders over long-term client health and satisfaction.

Off-shoring support results in cheaper overheard for the TEM firm but almost always results in a commensurate level of dissatisfaction on the client side in terms of level-of-support rendered. The support will most often lack in speed of responsiveness and overall quality of the technical support provided.

Inventory Management

Proper inventory management is one of the bedrock services for an overall healthy and robust TEM program, which can deliver a strong and consistently reliable ROI for clients.  To save money, many larger firms will generate inventories primarily based-off of client-invoicing.

This may be a cheaper and quicker way for the TEM firm to build-out an inventory for their client, but it is certainly not the best and most accurate way. Specifically, a better way involves leveraging additional cross-referenceable data sources to triangulate data to develop greater surety with respect to services within inventory (e.g., Tested and verified data; all speeds; PIC, LPIC, DID, and TSP codes; as well as features).

Larger TEM vendors will often not attend to verifying every line, circuit, number, and asset within the inventory. This type of “inventory” will generally be a loose approximation of existing services rather than a definitive quantification of actual inventory.

Multiple Technology Platforms

Because many of the larger firms focus on inorganic growth through acquisitions, the TEM will usually have multiple technology platforms behind the scenes even if this is not fully transparent to the client.

This unavoidable reality of accelerated inorganic growth creates many inefficiencies and data mismanagement opportunities for the TEM. The client may not be aware of some or all the difficulties but will ultimately be negatively impacted by the drag on operational effectiveness and efficiency.

Takeaway

When considering a Telecom Expense Management provider, be weary of the large TEM provider that claims it can be the quick and easy answer to all your Enterprise Expense Management challenges. Chances are that the big company that makes you feel safe may not be the safest place to land after all.

Solid TEM solutions that generate material ROI are available, but they may not be as quick, cheap, and as easy as the larger owned providers would have you believe.

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