The Need for Telecommunications Expense Management
Today’s businesses heavily rely on technology to operate virtually every business function. Engineering, sales, business operations, DevOps, marketing, customer support, IT and security, finance, and HR all have their favorite and necessary technology and applications. Besides onsite software, technology equipment and maintenance contracts, the average company with 200 to 500 employees uses as many as 123 software-as-a-services (SaaS) applications with 19 unique billing owners – and there are no signs of the IT infrastructure getting any smaller.
According to Gartner analysts at its October 2020 IT Symposium/Xpo, global technology spending is expected to come close to $4 trillion in 2021, a four-percent increase since last year, even with COVID-19 still raging. But the COVID-19 pandemic is shaking things up, forcing companies of all sizes and in all industries to rethink their technology investments as capital shrinks and priorities shift.
Thanks to the pandemic, companies today are having to focus more on survival rather than growth, and that means using tools like telecommunications expense management (TEM) to manage their existing communication and collaboration network, as well as their entire technology platform. With offices shut down and people working from home, businesses must balance the need to support a more distributed workforce with the necessity to reduce costs any way they can without sacrificing operations and productivity.
McKinsey recently said that cost management will be essential for businesses to survive the pandemic and its repercussions that will likely be felt for years to come. A new survey conducted by the company found that many organizations are accelerating their cost-reduction targets, modifying their operating models, and redefining their functional priorities.
IT leaders need telecommunication expense management tools to not only gain control of their telecom technology expenses across their business but to also find ways of reducing costs across the enterprise, particularly during COVID-19 times. This may be easier said than done, but the rewards are well worth the effort.
With so many contracts, apps and equipment to manage, there are bound to be several duplicate or orphaned subscriptions and technologies. Each one of these cost money to maintain, and contracts often renew without regard to whether the organization is actually utilizing the subscriptions and equipment or not. When discovered, however, companies can streamline their network, eliminate the unnecessary spend, and focus budgets on the essential technology that continues to bring corporate value.
Automating the Management Process
Managing all of this technology and related systems is challenging, and few organizations have the resources, time, or tools to do it consistently well without telecommunications expense management. While a technology expense management tool is beneficial, there still remains additional opportunities for cost reductions.
Gartner defines telecommunications expense management as services that “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).” As defined here, telecommunications expense management focuses primarily on costs, but those “corporate communications and associated IT services with their inventories” is not just a simple list of expenditures.
Telecommunications and their costs are highly complex. It takes an enormous amount of technology to support a distributed workforce. Each third-party supplier invoice often comes with hundreds or thousands of line items that combine equipment costs with service costs per owner or location. In order for an organization to ensure they are paying for exactly what they are using and there are no errors in any of the invoices, someone has to manually verify each and every line item matches the specific contractual terms – all before the invoice is due to avoid late fees, interest, and service interruptions. It is an impossible, recurring task that is ripe for mistakes and missed items, almost always leading to overspend.
This is where telecommunications expense management comes into play. A tool will automate this time-consuming and error-prone task, ensuring bills are accurate and paid on time. Organizations who invest in these tools have greater confidence that they are not wasting precious dollars on inaccurate billing and late fees.
A Better Solution with Technology Expense Optimization
While telecommunications expense management is a giant leap forward for controlling costs and freeing up resources, companies can still do more to reduce costs, particularly during these challenging times when every dollar counts. Companies still need a tool that keeps contracts, subscriptions and billing under control to save costs, but they can benefit further with an enhanced solution that considers the entire network and all of the third-party vendors involved.
A technology expense optimization tool takes expense management to another level, making it an ideal solution for companies that are in COVID-19 survival mode. Beyond invoice tracking and payment, the optimization tool automatically captures the real-time inventory of network technology, identifies product and service redundancies and underutilization, resolves invoicing discrepancies and contract issues, and alerts managers when contract milestones are approaching – all automatically and continuously.
By expanding telecommunications expense management to telecommunications expense optimization, organizations have always-current insight into the true state of their technology services across the enterprise. They know if there are any underperforming SLAs or billing inconsistencies and can fix them with the click of a mouse using embedded exception resolution tools. They no longer have to try to keep track of when each contract is up for renewal and the pricing or service changes that may come with it.
The technology expense optimization solution manages all of these tasks for them, keeping a reliable record of every piece of equipment in the network, each contract, invoice, and issue resolution. All of the data is in one place and the tool integrates with most leading accounting and vendor management applications and ERP tools.
For companies that are looking to reduce costs and improve network vendor management, technology expense optimization is the fastest, most reliable method.