Managing your telecommunications expenses can be frustrating. Telephone and Internet bills are cryptic. Even those steeped in telecommunications for years find many bills to be both confusing and lacking basic information. Traditional carriers have made things so complex that an opportunity was born, and telecom expense management (TEM)
companies filled the need to sort, interpret, and process your phone bills. It’s a bit of an exaggeration, but I’ve said the TEM industry was born out of phone companies’ incompetencies.
A great example of this is my company’s AT&T bills. OneNet, ReadyLine, local stand-alone, Thrifty, Club, legacy SBC….. you name it, not one of those phone bills actually has the service address on it? Why not? I can understand that a long-distance bill for multiple offices may not have a service address, but why did AT&T and Verizon choose not to provide the service address on the phone bills for my hundreds of stand-alone local phone bills? For those managing large enterprises, the only way to effectively manage your invoices is to maintain your database or use a TEM.
TEM is an industry that has sprouted from a need to manage the complexities of orders, billing, disputes, credit tracking, inventory management, etc. TEM services nearly always include wireline voice and data services. However, not all TEM vendors manage wireless services.
Where does their staffing come from? Some hire former carrier employees. Some are born from successful consulting companies.
A few carriers have started providing TEM services. The reason for this is interesting, and a topic for a future article. For the most part, customers have viewed this as the “fox guarding the henhouse,” and not many enterprises have adopted carrier TEM.
If you have the staff and a well-built system of processing your invoices; and if you have visibility to meaningful data, you may not need a TEM. In this case, periodically hiring a consultant may make more sense.
However, if you find your department buried in carrier bills, paying late fees, lost in the lingo, and unsure if you are paying for circuits that are in use, a TEM may be extremely helpful.
TEM can be divided into two basic types — self-service SaaS and fully-managed service. The former provides a web portal for your team to keep up with inventory management, review expenses, and maybe run reports. These companies are little more than a software company. The latter offers more human interaction, MACD processing, meaningful conversations, and human resources. And some TEMS offer a middle-ground hybrid of the two. Every TEM is unique.
Service offerings between TEMs can vary greatly. For example, some specialize in mobility, while others only work in wireline services. Some provide total lifecycle services, while others are limited to bill processing. Some include inventory management, while others don’t. A few will proactively look out for billing errors, while others will only address an issue if you bring it to them. Some will chase down problems, while others will kick it back to you for the answers. Some will hold carriers accountable to your negotiated pricing, and others expect you to catch a carrier’s oversight. Some reconcile orders and quotes against the first bill; some don’t — the list goes on.
Onboarding a TEM
If you currently process hundreds of phone, Internet, and data service invoices today, plan on spending several months of full-time work to transition this to your TEM. If you process over a thousand carrier bills and/or accounts and don’t have these bills reconciled to service addresses and accounts, plan on about a year of onboarding time. TEMS will tell you three to six months, but trust me, it takes that long to get the carriers to redirect invoices and provide online access for your new TEM.
Onboarding time can vary widely depending on many factors such as: Does the out-of-the-box TEM service slipstream will into your process or is development required? Will you give the TEM POA to your bank account or will your company do a wire transfer to the TEM to pay on your behalf? Or will the TEM services end at the approval process and not include payment? LOAs will need to be drafted, approved by legal, signed by both parties, and distributed to the carriers. Workflow documents need to be drafted along with a responsibility matrix. These will be the framework of the playbook agreed upon by both parties.
Shopping for a TEM can take many months. If you are a mid-to-large enterprise and TEM is new to you, plan on spending about nine months to learn the ropes and shop around, especially if you intend to formalize an RFP.
Pricing factors may vary between TEMS. Shopping for a TEM is complicated. Companies will generally find that TEMs uniquely price their services. In other words, comparison shopping between TEM providers will result in a fairly comprehensive spreadsheet.
In a recent conversation with a tech company that provides carrier services, a representative said, “We are so different than typical carriers that you aren’t even comparing apples to oranges; you are comparing apples to an aircraft carrier and we are the aircraft carrier.” In this conversation, they were correct because it was someone from Amazon, but that’s another story for another day .
What They Can Do for You
I find a lot of value in TEM reports. The ability to sift and sort data into meaningful information is extremely helpful. Recently, I was able to identify the fact that the cost of my POTS lines had increased gradually over about a six month period. All other services with that carrier had remained unchanged. As a result, I was able to take this information back to the carrier and re-negotiate improved pricing, thereby saving
my company a significant amount going forward. I’ve also been able to identify and- toll-free services with multiple carriers and consolidate them to a single account for another cost savings. For large enterprises that are constantly opening and closing facilities, the ability to run a report for active services at closed offices is invaluable. Some TEM systems can automate these reports and email them to you based on your chosen periodicity.
With an eye for trends and anomalies, here’s a shortlist of monthly reports I review regularly and consider absolutely necessary to run the department efficiently:
- Total wireline voice cost
- Total wireline data cost
- Wireline voice cost per site
- Toll-free costs per site
- POTS cost per site
- Wireline voice cost per user
- Wireline data cost per user
- Total POTS
- Cloud-voice services cost per site
- Total cloud-voice cost
- MACD orders
- Pending orders
What They Do NOT Do for You
Contrary to popular belief, most TEMs don’t proactively look for ways to reduce your telecom costs. TEMs are not vested business partners; they are another vendor that can add a great deal of value to your business. Some TEMs charge for their services based on a percentage of your telecom expense. As a result, some will find TEMs slow to place disconnect orders, slow to process disputes, quick to place new orders, etc.
Shopping for a TEM company can be a daunting and confusing task, especially if you have never used a TEM in the past. If you’ve never used a TEM, it’s important to understand what they do and equally important, what they don’t do. Not all TEMs have equal core competencies. The basics include:
- Process invoices
- Invoice payments
- Bank funding
- Dispute errors, request credits
Typically, services beyond these basics are outside the core offerings. These offerings come à la carte or sometimes even as loss leaders. Loss leaders are products or services offered at or under-cost to get customers in the door.
Don’t expect a TEM to take extra initiative to review your master service agreement (MSA) to ensure that the terms of the contract are met. This level of assistance is usually provided when audits or other services are negotiated à la carte and include:
- CSR requests
- MACD orders
- Inventory management
- Open/close accounts
- Identify and dispute billing errors
- Disputes and credit management
- First bill reconcile to order
- Accurate carrier billing costs to contracted pricing
- Carrier negotiation
- Contract reviews
- Lifecycle management
- Audits and cost reduction
When contracting with a TEM, it’s important to understand that they won’t care as much as you do about your expenses. After a year or two, you may begin to wonder if you are receiving the value you expected. As a data geek, I like reports. Reports can tell a story to help a telecom director understand the changing landscape of a business’ technology needs as well as the spending habits. I recommend you decide on the types of reports you want while shopping for a TEM and even specify those reports in the RFP and ultimately, the contract.
Is a TEM right for you? Only you can decide. If you only need TEM for mobility, the pool of TEM providers is different than wireline TEM. If you need a TEM that will pay the invoices, the options are limited to those with this capability. Can you currently manage your telecom expense and lifecycle management responsibilities? Can you currently run reports and understand your telecom expenses? If not, maybe a TEM would provide value to your department. Which TEM is the best? At the end of the day, it really depends on your business needs and the capability of the potential TEM provider.