The time-consuming nature of controlling and paying technology expenses today makes it challenging to vet them yet still pay them on time. You want assurance that you were billed correctly, but if you take too long to pay, you could risk paying late fees, interest charges, service disruption, and erosion of goodwill between you and your suppliers.
Businesses would benefit significantly from more intelligence from all of that invoice processing effort. If you could just capture that data across your organization, imagine the value you could create for your company.
The Rise of Technology Expense Management
Think for a moment about the burden of processing your company’s telecom and technology invoices — hundreds of invoices, coming in from dozens of providers, received at all different office locations. Often these invoices are manually managed or entered into multiple spreadsheets that are routed around to various approvers within the financial and IT departments of the organization.
Paper invoices cost a fortune to receive, print, process, and store. Any time you active new services, you contribute to another new mountain of paperwork. Worst of all, processing all of this paper makes it challenging to pay your bills on time and avoid sizable late fees.
Technology expense management (TEM) was developed to minimize this expensive, repetitive, and error-prone work. TEM makes finding inaccuracies in invoices – some of which are thousands of pages long — much easier than ever before.
Without this support, you may suspect that there are inaccuracies within an invoice that’s one thousand pages long. Still, with less than 30 days to check the invoice, identify the issues, open billing disputes, and get the invoice approved and paid, it’s virtually impossible to do anything about it.
Technology expense management automates that effort, enabling you to work smarter and process your invoices accurately, confidently, and timely.
Technology expense management is a considerable improvement, but it can also present a new set of challenges. That’s because most TEM tools simply make you aware of problems that you didn’t know you had.
What TEM doesn’t do is actually solve those problems for you. That’s where Technology Expense Optimization (TEO) enters the picture.
Technology Expense Optimization
TEO goes beyond just managing invoices and offers both solutions to problems identified and opportunities to achieve an even better return on your technology dollars. With TEO, your paper pile is transformed into data that doesn’t just sit there; it provides insight. That insight is what allows you to make smarter decisions about how you direct your technology budget, how you allocate costs to areas using the services, and how you manage supplier relationships and contracts, all while streamlining your invoice management process.
The Advantages of TEO Over Traditional TEM
Technology expense optimization does everything that TEM does but adds several new dimensions. Importantly, TEO fully centralizes data about the technology services in place across your entire organization. From service specifications, to cost components, to commitment terms and contract copies, all critical decision-making data is stored in one easily accessible place.
TEO puts that data to work for you in ways that TEM does not. With data centralized, TEO uses your own information to compare costs of technology services across various locations, suppliers, and contract types to unearth opportunities to reset outdated, off-market, or obsolete pricing, migrate to more competitive suppliers or consolidate existing contracts.
TEO enables you to quickly identify stranded, duplicate, or unneeded services so that budget dollars can be redirected into current projects. TEO can also facilitate corporate acquisition, disposition or restructuring activity that requires a firm handle on the physical location and ownership of services as well as any restrictions on contract assignment.
Perhaps most importantly, true TEO leverages this centralized data pool to perform a complete service level audit of your monthly technology invoices, line by line, and automatically within minutes of receiving electronic billing files. Your attention can, therefore, be directed only to exceptions that require review or intervention, allowing you to work even smarter than you can with TEM.
This dynamic and detailed monthly match of services to billings, and the highlighting of exceptions, also alerts you when service changes are made anywhere in the organization. In a world where over 40% of technology spend originates outside of the IT department, that’s what we call intelligent data.
Technology expense optimization also enables smart allocation of technology costs back to the individual users, groups, or business units that are actually consuming those services. No longer does the IT department need to absorb the exponentially increasing costs of telecom, networks, applications, cloud computing and storage, cybersecurity, and disaster recovery.
TEO provides the functionality to assign shared costs to business units quickly and automatically inherit those accounting allocations every month when the bills come in, eliminating a traditionally burdensome, time-consuming, and repetitive task. The benefits for large or highly decentralized organizations are apparent. Without disrupting any existing processes, you can gain visibility into the types and costs of services at any level or location of your company. You can embrace rapid business growth via on-demand services and hosted collaboration tools or undertake large-scale technology migrations but still retain the oversight, control, and accountability you need to manage your global technology infrastructure effectively.
Your business decisions will no longer be driven in part by how much paper and headache will be added to the process, but rather by how much value you can generate for your company. Technology expense management may stumble upon cost savings or optimization opportunities in the ordinary course of processing invoices, but that is where TEM stops. The work of implementing those suggestions will move onto your already full plate.
TEO, on the other hand, proactively digs deep into your own data to root out budget savings and identify ways to get the best services at the lowest cost and, if you approve, does the legwork to implement those proposals. TEO will even calculate and track the savings and return on investment that you’ve achieved for your company.
If you are ready to move beyond management and fully-optimized IT spend, BCM One is here to help.