What is TEM?

Telecom Expense Management (TEM) is a term used to define an approach to managing all telecommunication service expenses such as voice, data and wireless with a combination of software tools and manual auditing. In managing all these services and related processes, its goal is to minimize costs and maximize process efficiency.

For a small company, it can be as simple as checking over your phone bill every month to make sure you aren’t billed for services you don’t want. For larger companies, it is a more formal program to optimize spending on telecom services. Most of the attention goes to bill auditing and getting refunds for billing errors, but an effective TEM program can do more than that.

A Little History

The cost of voice and data communications is dropping. One casualty of this price plummet is that you no longer have experienced account teams who know your account and are your single point of contact. The new breed of account representatives there to serve you is inexperienced with your telecom needs and is more sales-oriented than needs-oriented.

For many businesses the overall telecommunications expense is growing. Workers are more mobile and the amount of communications between companies and their employees, including the huge volume of information they exchange, has been growing as well. Email, Internet, PDAs, ecommerce and our increasing tele-commuting workforce all lead to an increased demand for instant and continuous exchange of information using many kinds of telecom devices. The increased complexity of devices and services and the lack of transparency in carrier charging models have led to confusion and a need for a way to manage and control telecom costs.

In today’s business landscape, many companies are downsizing support staff, carriers are providing less support, and communication in general is becoming larger and more complex. Out of all this confusion, Telecommunications Expense Management was born. TEM provides a structured and professional way to manage the telecom spending of a company, no matter how large or small. This management can be in the form of software used by a manager or an outside telecom expert.

What Are the Problems?

There are quite a few. These include but are not limited to:

1) Using multiple carriers for different services that use different invoice formats. This makes it difficult to match and allocate costs effectively;

2) Not having a complete inventory of the company’s assets including wireless devices, headsets, hardware, computer networks, etc.;

3) Difficulty in being able to apportion telecommunications costs to divisions, teams or departments with any accuracy;

4) Not having the company resources to manually audit each invoice. Between 7-12% of bills are in error. For large companies, this is a substantial amount of money they could be losing every month; and

5) Not understanding costs. You can’t control the cost of something when you don’t understand how it’s billed or what you’re getting for your money.

What are the Benefits?

Managing telecom services is complex and requires constant attention. A qualified telecom expert can not only perform systematic audits but can also alert the company to new cost-saving options. Software programs can allow companies to eliminate waste and optimize resources.

Both software and outside experts can help you to: reduce time through systematized processes; reduce costs through error identification; reduce risks through better reporting options; and increase control and thereby accountability.

Software will help the Telecom Manager’s knowledge and understanding of the products, services and costs for his company’s telecom spending. An outside expert can handle disputes with carriers and get price quotes for new services. They can also restructure your agreements and contracts with current providers and find less expensive providers.

A solid TEM platform will provide a centralized solution for inventory control and procurement, contract compliance, budget and spending tracking, and invoice processing. Proactive systems can alert you to policy breaches and contract compliances.

Large companies are the prime candidates for Telecom Expense Management. However, small and mid-size companies that need to organize and monitor their telecom spending would benefit as well.

For most small to mid-size companies telecom spending is the responsibility of an IT person, an office manager, an accountant or a combination of all three. For these types of organizations, the benefit of a TEM solution is based on labor saving efficiencies through automation. This benefits both telecom and financial sides of the company by providing a way for them both to monitor, control and report on company telecom.

Considering the importance of telecommunications in the operation of your daily business, Telecom Expense Management is a critical business strategy. Your company needs to not only track its spending, but also to maximize its telecom resources. TEM lets you make informed decisions rather than educated guesses.

Everyone has to negotiate at one stage or another. These negotiations could be in the form of promotions, sales calls, hiring, and more. For companies, negotiations are in the form of contracts, business deals and cost management. The rule of thumb for most negotiations remains the same although the situation, process, and result may be different.

Negotiation: Basic Techniques

1. This is the most important aspect of any negotiation – never be unprepared. Understand the subject, your benefits and losses, and how the outcome will affect the organization.

2. To maintain an advantage, try to understand what the other party may tend to ask for or believe in. Get as much information as possible on their stance on the subject, what they are looking for and also what they are expecting from you in the offer. Understand the rationale behind their negotiation to get a better insight into their negotiation tactics.

3. Know the least you may need to settle for without incurring losses. You can also treat this as a yardstick to build up your negotiation tactics.

4. Show an openness, flexibility and willingness to talk about the negotiation.

5. Calmness and patience should be your armor. If you sense that you are losing control of yourself or the situation, take a break. Decisions made in anger are almost always wrong.

6. Be as clear as possible with your terms and conditions.

7. If you have the slightest instinct that someone is bluffing, insist on their providing the proof to support their claims.

8. Stressing the common goals is a good way of keeping the negotiations workable.

9. Listen attentively to understand better.

10. Concentrate on one particular issue at a time.

11. Do not consider negotiations as a win or lose proposition or that to win you have to take advantage of the other party. Remember negotiations are the basis of a long and, hopefully, fruitful relationship. Carrying over the animosity by cheating or taking advantage of each other will lead to failure in the long run.

12. If the offer seems even remotely acceptable to you, finalize the deal immediately. Do not give the other party a chance to ponder over things.

Contract Negotiations

Contract negotiation is an intrinsic part of any business arrangement. This is especially true with telecom, since telecom and telecom expense management is vital to business operations and is usually among the top five company expenditures. The bottom line of any successful business venture depends on good communications systems controlled by expert telecom expense management.

Unfortunately, small and medium size businesses frequently do not consider contract negotiation a part of telecommunications management. Often, various people such as the office manager or a systems engineer or the IT or HR department handle the communications. While they may be skilled professionals in their fields, their knowledge and experience in terms of telecom contract negotiation is quite limited. Too often, the need to acquire or operate through a telecom management network is never considered.

By adopting and implementing telecom contract negotiation and control techniques, an average company can save 10 to 30 percent of their annual telecom expense. A professional in telecom expense management carries certain requisites to the negotiating table that a non-telecom professional may not have. People experienced in telecom contract negotiation know that the rate is not the only variable and that, in fact, many more costs can lie hidden in the terms and conditions of the contract. A telecom consultant or auditor that deals regularly in contracts would know the telecom rate traps.

The best way to know your telecom network requirements is to perform a thorough circuit and services inventory of local and distant data and wireless devices that you have and whether they are being fully utilized. Break down your telecom expenses to the minutest detail and understand your trends and needs. Modifying, changing or stopping services should be an ongoing process.

Also consider the refunds and benefits (and loss) from reducing services. A telecom audit will help uncover refunds due to invoice errors, lower certain ongoing expenses, and reveal techniques to improve or optimize existing telecom networks. Getting this done with experienced telecom auditors will reap many great benefits.

The next task is to eliminate unused phone lines. On average, a company with a 100 employee workforce has plenty of phone lines and some of them may remain unused over a period of time while the company is still paying for their service. This alone can run into thousands of dollars annually. Negotiating a workable deal with the telephone company is the best solution for these problems. Having a few negotiating techniques up your sleeve might make the job easier but having an experienced telecom professional on your side will guarantee the best results possible.

Telecom costs equate to 3.6% of a typical companies entire P&L spend which would explain why “telecommunications expenditure remains near the top of every CIO’s expense list” (Gartner) and why “Telecommunications cost management has become one of the hottest sectors in today’s business process automation marketplace.” (Aberdeen Group)

More than 50% of large enterprises don’t know what they are spending on telecom related services across the company. The telecommunications spending area is so wrought with inefficiency, in fact, that most people don’t know how much they spend on telecom services, never mind how they can best manage those budgets. (Aberdeen Group)

From our experience in this space Xceed has discovered that the difference between ‘average’ and ‘competitive’ rates is as much as 40%. Only 5% of the contracts we’ve reviewed could be classed as ‘competitive’.

However, good telecoms expense management isn’t just about negotiating the best contracts, it requires active management of the telecoms providers and a high level of scrutiny when it comes to checking bills. A staggering 80% of telecoms bills include hidden charges or mis-billing. The traditional approach of “stare & compare” simply isn’t effective. Some global blue-chips still rely on a plus or minus 10% approach when it comes to paying their telecoms bills – ie, if it’s + or – 10% of last month’s bill then it gets paid without question. When you understand that BT alone has over twenty different billing systems which don’t talk to each other you’ll appreciate that a more stringent approach always pays dividends.

Checking you’re receiving the correct tariff is straight forward enough. However, it starts to get more complicated when you look into the number of zero or low usage lines, closed locations, high usage, non-business related charges and other aspects of variable expenditure. In short, it’s as much about asset register management as it is bill management.

 You’re entitled to recover over-billing and mis-billing for up to six years from your network provider. However, the most dramatic savings are realised when this is one element of a cohesive approach to telecoms and inventory management, as Giga Information Group so snappily states “Bill management should be part of a strategic plan, a step that will reduce enterprise costs and achieve savings in the short term, while creating the infrastructure for streamlining processes and systems and laying the foundations for a long-term solid solution for managing and optimising the provision of communications.”

 So, in our experience it’s well worth treating Telecoms Expense Management as a serious project and covering the full breadth of Fixed Line, Mobile & Data Networks, from both a fixed and variable cost perspective. We’re sure you’ll identify at least 20% savings and in extreme cases you’ll save over 50% of your current spend. Well worth investigating.

Business Intelligence (BI) today promises faster, more automated control over telecom expenses. The change is happening and it’s happening now. The advancement in business monitoring capabilities within next generation telecom expense management solutions lends for some exciting developments and possibilities.

The “eating healthy and regular exercise” regiment remains in the forefront of headline news. In the wake of a harried obesity crisis, fast-food empires are taking efforts to revamp their menus by eliminating trans-fat and offering healthier choices beyond the double-cheeseburger and chocolate shake. Schools are replacing sugary treats and salty snacks in the vending machine with granola bars and all-natural juice drinks. People are becoming increasingly aware that what they do today, will affect their lives tomorrow. A similar realization has gained momentum within the telecom landscape. But just like maintaining a balanced diet and exercising regularly, it takes work to get an organization’s telecom expenses under control: it requires getting it right and keeping it right with enhanced business intelligence

Plan: No Diets Necessary
Many individuals are recognizing that fad diets and weight-loss pills are glamorized shortcuts that promise unrealistic results. This is similar to past practices in the telecom expense management industry, where companies would conduct historical audits to identify overcharges. While successful in the short-term, the issue of improving the overall management of telecom expenses is not solved with one time audits, leading to similar mistakes (and overcharges) year after year.

Instead of waiting until the problem is unmanageable, begin by establishing clear objectives about getting your telecom expenses in control: start with a plan. Maybe you want to eliminate the use of cumbersome spreadsheets and organize all expenses into one robust reporting tool. Or maybe the capability to track your organization’s total monthly telecom spend across all vendors is a better place to start. Whatever the desired results may be, establishing the objective in the beginning will avoid the pitfalls of a “crash” initiative.

Budget: Cake for Breakfast, Lunch and Dinner is not Okay
Planning for slip-ups and unexpected gorge-fests means you are being proactive in trying to maintain a healthy lifestyle. Similarly, this measure is applied to the budgeting aspect of business intelligence. Business intelligence reporting capabilities track previous spend and usage. The data captured from these reports provides quick, accurate analysis of the state of your organization’s telecom environment. Anticipating when your organization will be adding several services at once, or recognizing that certain months produce higher telecom costs, is valuable information. Funneling that information into a dashboard with drill-down capabilities provides accurate executive information and sophisticated analysis capabilities. Gauges and graphs support quick, visual analysis.

Forecast: Map it Out
Noticing trends and anticipating higher consumption, makes it easier to “map-out” the next steps. Predicting that you will eventually succumb to that occasional chocolate éclair will allow you to compensate for that expenditure and readjust your plan and budget. Companies looking to apply similar concepts to their telecom expenses are realizing the advantage of this type of analysis.

Consolidate: Less is Better
The premise behind staying healthy relies on getting rid of the bad, to make way for the good. Beneficial reductions are needed and the realization that desserts at the end of dinner is no longer a part of your four-course meal can be difficult to accept – but – referencing the initial plan can aid in achieving your goal. The consolidation within business intelligence takes diligent action. Locating lines that need disconnecting, identifying where electronic data can be used instead of paper, and over and above everything else, becoming more proactive towards the telecom environment is a key differentiator within BI.

In order for an organization to achieve their desired results, certain long lasting changes need to occur. Those changes and plans differ from company-to-company but the goal remains the same: gain control and visibility to achieve reductions in telecom expenses by taking action based on the increased knowledge that is gained. Business Intelligence is about being smarter and more aggressive towards proactively managing telecom expenses. It requires sticking with the plan and actively spot-checking to make sure your business intelligence initiatives are still relevant. And just like maintaining a healthy lifestyle, performing regular exercise will lead to a leaner and healthier you – your organizations results, relating to business intelligence, will also be rewarding; enabling the management of your telecom expenses to become leaner, more efficient and competitive.

Analyst Observations

Telecom costs equate to 3.6% of a typical company’s entire P&L spend which would explain why “telecommunications expenditure remains near the top of every CIO’s expense list” (Gartner) and why “Telecommunications cost management has become one of the hottest sectors in today’s business process automation marketplace.” (Aberdeen Group)

 

More than 50% of large enterprises don’t know what they are spending on telecom related services across the company. “In fact, this area is so wrought with inefficiency that most people don’t know how much they spend on telecom services, never mind how they can best manage those budgets.” (Aberdeen Group)

 

From our experience in this space Xceed has discovered that the difference between ‘average’ and ‘competitive’ rates is as much as 40%. Tellingly, only 5% of the contracts we’ve reviewed could be classed as ‘competitive’.

 

Historical Overbilling

However, telecoms expense management isn’t simply about negotiating the best contracts; it requires active management of the telecoms providers and a high level of scrutiny when it comes to checking bills.

 

A staggering 80% of telecoms bills include hidden charges or mis-billing. The traditional approach of “stare & compare” simply isn’t effective. Some global bluechips we know still rely on a plus or minus 10% approach when it comes to paying their telecoms bills – i.e. if it’s + or – 10% of last month’s bill then it gets paid automatically. When you understand your network provider has a large and eclectic collection of billing systems that aren’t always in sync you’ll appreciate that a more stringent approach always pays dividends.

 

Checking you’re receiving the correct tariff, whilst time consuming, is straight forward enough and can even be done manually – which will yield results. However, for large or even medium sized organisations it just isn’t practical to scrutinise every line of every bill for Mobile, Fixed Line and Data charges. This is where Software as a Service can help as there are tools which, correctly configured, can compare millions of lines of billing data against your contracted tariff in a matter of seconds. We’ve never seen this exercise fail to identify 10% overbilling, frequently much greater, irrespective of the supplier.

 

If your personal mobile or landline provider routinely added 10%-40% to your monthly bill we don’t think it would be long before you asked for a rebate. Surprisingly, very few businesses have identified this, despite the fact that for many, telecoms comes second or third to staff costs in terms of total spend.

 

One global blue-chip we know spends over £500m on their telecoms bills but until recently had never gone beyond “stare and compare” as a method of managing this cost

and challenging their suppliers to do better.

 

You’re legally entitled to recover overbilling and mis-billing for up to six years from your network provider. However, the most dramatic savings are realised when this is one element of a cohesive approach to telecoms and inventory management, as Giga Information Group so snappily states “Bill management should be part of a strategic plan, a step that will reduce enterprise costs and achieve savings in the short term, while creating the infrastructure for streamlining processes and systems and laying the foundations for a long-term solid solution for managing and optimising the provision of communications.”

 

Zero Usage & Inventory Management

TEM starts to get a little more complex when you look into the number of zero or low usage lines, closed locations, high usage, non-business related charges and other aspects of variable expenditure. There are two aspects to this area of TEM:

 

First is the inventory or telecoms asset management aspect. Between 15% and 35% of all fixed telecoms assets are surplus to requirements. The number of lines being paid for rarely matches the number you’re actually using, which goes across fixed line, mobile and data networks. Recently we came across a famous computer gaming company which was paying €18,000 per month for a high-speed pipe into its Madrid office. This had been paid for 18 months, without question; until we pointed out that it had never been used. Not once. Ever.

 

Changing Practices

So far nothing we’ve outlined carries any risk to the business when it comes to implementing the savings that are identified. The areas that do carry an element of risk are those which involve changing practices. This includes high-usage, non-business related calls and other aspects of variable cost.

 

A simple example is people frequently using 118 or 0870 numbers, usage of which is commonly covered by company policy or by simply making the numbers unavailable. But

how many times do your organisation’s landlines get routed externally for internal calls? How often are your Blackberrys calling other company Blackberrys but being charged at standard mobile rates? Not many Telecoms Managers let alone Executives can answer these questions but there are real savings to be made in this area.

 

There are also specialist tools and companies which can give you the answers or the tools to get the answers yourselves. The only slight risk is ensuring that any change in working practice doesn’t affect your business.

 

In short, good Telecoms Expense Management is as much about asset register or inventory management as it is about bill management.

 

We’ve found it is important to treat Telecoms Expense Management as a standalone project, covering the full breadth of Fixed Line, Mobile & Data Networks, from both a fixed and variable cost perspective. By combining the various elements mentioned in a comprehensive TEM project we’re sure you’ll identify at least 20% savings and in extreme cases you’ll save over 50% of your current spend.

 

Current Market

A number of companies are currently doing exactly this and in many ways it is the US leading the way. TEM is an established, billion dollar industry in the States. Major US corporations like American Express and Bank of America are rolling out comprehensive TEM solutions across their global estates. Both American Express and BoA have opted for one of the US market leaders, who offer a comprehensive TEM solution which includes installing TEM hardware on the client site.

 

By comparison the UK is significantly behind with no clear market leader for Telecoms Expense Management and very few organisations understand there’s more to TEM than the recovery of historical overbilling.

 

Search for TEM companies in the UK and you’ll predominantly find Procurement Consultancies which offer a bill checking and recovery service which is conducted manually. There are also air-time resellers who offer Telecoms Expense Management as a pre-cursor to selling you their telecoms services but there are also a few UK centric

companies and products that specialise in TEM and offer independent consultancy with the right software for the job.

 

The best approaches we’ve seen include a comprehensive review of the current inventory along with powerful software to eliminate or recover over-billing. For sustainable savings the ultimate solution lies in Software as a Service (SaaS) or a bureau / managed service which can manage your asset register at the same time as precisely checking each month’s itemized billing. This helps to ensure you maintain an up to date and accurate telecoms asset inventory (which in itself can be invaluable in managing office relocations and IT integrations) at the same time as driving year on year savings which are typically in the region of 10%-15% when using TEM specific software.

 

Conclusion

 

So should you be interested in Telecoms Expense Management?

 

Let’s put it this way; if you could save 1.44% of your entire P&L spend without impacting the performance, morale or service of your organisation, would you? Of course you would.

 

This is effectively the opportunity on offer from the leading Telecom Expense Management firms. We’ve seen an average of 40% savings on over 20 TEM projects which we’ve monitored. So with Telecoms costs equating to an average of 3.6% of a company’s entire P&L spend it’s reasonable to argue that 1.4% of your P&L spend can be removed with minimal risk.

 

So, should you be interested in Telecoms Expense Management?

 

Emphatically; Yes.

One of the major transitions in wireless telecom right now is the shift from voice-only to data devices. The standard company-issues handset is already a low-level smartphone; eventually, every business will want to exploit full-featured internet, real time messaging and cloud software to maintain a truly mobile workforce. The primary challenge is budgetary; there are so many data plans to chose from that it’s hard to decide which will be the most cost-effective.

According to telecom expense management firm GILL Technologies the key is to understand your usage. While the company uses a proprietary software service called Tele-Watch to track its own clients’ data usage, small organizations with a handful of smartphones can control their billing with a very simple manual calculation to determine their cost per megabit.

Cost per bit refers to the price of each megabit of data transfer. This varies greatly based on data plan and type of usage. It’ll go up when you exceed your data plan’s limit, use it in ways not covered by the plan, or go outside your coverage area. For example, if you use your phone as a modem tethered to your laptop your cost per bit may rise significantly for two reasons. First, laptop usage tends to be more data intensive. Second, your phone’s data plan may not cover tethering. Third, many users tether to get laptop internet access outside of home, office or Wi-Fi hotspot coverage – situations where they may be outside of their coverage area.

To calculate your basic cost per megabit you need just two things: your total data usage and costs. The more bills you have, the better; try to calculate the cost based on at least three months of billing. Don’t worry about types of charges for now. This global cost is your company’s benchmark – a number you want to reduce with intelligent usage and plan selection.

Get a detailed bill from your carrier that not only lays out your basic data charges and usage, but details overage, data roaming and other unusual charges. This won’t change your basic cost per megabit (which is based on total billing) but will allow you to figure out the per-megabit charges for any occasional charge. This is your next step.

Once you know your global and occasional per megabit charges it’s time to ask the following questions:

What plan makes the most sense for our usage?

You should pick a data plan with a cap as close to your usage as possible – preferably very slightly under your actual usage. If it goes over, compare the overage costs to the price increase of the next highest tier and choose the less expensive option. If your usage bounces over and under the threshold, examine how to reduce usage. If it varies greatly from one month to the next, ask your carrier about no-overage flexible plans.

What policies can we employ to reduce data costs?

Overage, roaming and services outside of your plan are the most common avoidable causes of a high cost per megabit. Compare your company’s operational area with your carrier’s data coverage and clamp down on wasteful data usage such as recreational web use (standard web pages are usually not a big deal, but streaming media can have a huge impact on your usage).

The answers will allow you to set a constructive smartphone usage policy, pick the right plans and keep your costs down, but it can’t save you the time spent on calculating and tracking costs, and can’t keep you informed of billing errors and carrier changes. For these, along with complex data needs, your best bet is to turn to telecom expense management professionals and cost reduction software.

Telecom expense management is one of the fastest growing areas in the telecommunications industry for one simple, obvious reason: Companies want to keep their cellular and landline costs down. Ten years ago saving money on these items was a relatively straightforward research and accounting task, but in the age of the smartphone, cell phone plans alone are complicated enough to demand attention from an expert. As multiple-service platforms subject to sophisticated (and according to some, deceptive) pricing schemes, modern phones often inflict the second highest expenses on businesses – just after payroll.

Telecom expense management experts put communications costs under a microscope, examining them for savings opportunities. A full service telecom expense management firm can not only generate savings requests for proposals (RFPs) but implement them through its own team of certified experts. According to telecom expense management firm GILL Technologies many cost audits discover savings based on the following three factors. These aren’t the only ways telecom expense management services save clients money, but they’re prominent enough to draw attention to in this article.

Cell Phone Billing Errors: Many people are surprised to learn that wireless carriers routinely overcharge out of sheer error – some estimates put the error rate as high as 30%, with most mistakes leading to added costs. Many billing errors are subtle and difficult for a non-expert to spot, such as erroneous dates for service migration and cancellation. Others are more blatant, but can fly under the radar in an enterprise-scale organization, such as when carriers charge for extra handsets.

Cell Phone Usage Analysis: Although gigantic cell phone bills display usage (along with other line items that are incomprehensible for the non-expert) they don’t provide any easy way to analyze your company’s usage across the entire fleet. Telecom expense management professionals don’t just find the cheapest plans based on basic costs, but on how members of your organization actually use their phones, down to the minute, message and bit of data. In a more dynamic environment where use fluctuates, RFPs will often feature pooled minutes and other shared resources to compensate for these changes. Otherwise, it becomes possible to select billing that fits your usage needs as closely as possible instead of one size fits all packages that effectively overcharge you for data, messaging and minutes you won’t actually use.

Carrier Analysis: Telecom expense management experts study the carriers as intensely as they do your business. That means they’re fully conversant in the major carriers’ latest pricing schemes and administrative procedures. This allows an analyst to renegotiate your contract from an educated standpoint, migrating services to a new carrier if need be without changing or interrupting any aspect of your existing service. You keep the same phone number and handset and at minimum, the services you’ve always used, but you pay less. Consultants can manage billing and services across multiple carriers in a way that would be impossible (or at least impractical) for an in-house accountant.

Once you add these tactics together you may be looking at a significant cost reduction. For example, some GILL Technologies clients have saved over 50% on their billing compared to their previous plans. These real savings (telecom expense management consultants typically draw profits from a percentage of the savings, so costs never increase for their clients) demonstrate why telecom expense management has become such a popular business to business service in both prosperous and uncertain economic climates.

Whether a business has only ten employees making a few long distance calls a day, or is a burgeoning enterprise with hundreds of employees conducting thousands of calls and data transfers every hour, it is important for that business to carefully manage their telecommunication costs.

Telecom Expense Management, or TEM, involves the constant monitoring of telecom expenses that accrue monthly. The goal of TEM is to ensure that invoices match agreed upon contract rates and tariffs, and to optimize the services offered by the telecom provider with the needs of the individual business. Effective TEM is an essential accounting task that must be conducted by companies and firms working in virtually all industries.

Billing errors lead businesses to overpay for the services rendered by the telecom provider. These errors can waste money on services that were neither asked for nor used and will significantly eat into profit margins over time. Billing errors can range from honest mistakes made by the telecom provider, to more insidious and deceptive practices that rely on a business’s preoccupation with other matters to sneak changes into the billing terms.

Here are some errors that have been known to occur.

1. Simple Human or Computer Miscalculations

A common error is one in which either a computer or human miscalculation leads to an incorrect total on a billing invoice. The miscalculation may only affect the amount charged for a single telephone call, or it might be one that substantially alters all the monthly charges. These miscalculations can be fixed by bringing them to the attention of the telecom provider.

2. Duplicate Bills

Large telecom providers are susceptible to the same issues that negatively affect any other bureaucracy. With multiple agents handling the same account, confusion and mistakes are likely to eventually occur. If an account is not properly flagged as being billed, or communication between employees is poor, duplicate bills can accidentally be sent to clients. And unless your company is vigilant in detecting duplicate billing, you might be overpaying. Once again, this error can be fixed by bringing it to the attention of the provider.

3. Incorrect Contracted Rates

The agreed upon terms between the business client and the telecom provider may not always be honored. Due to miscommunication between the client and provider or sloppy account management, the rate assigned to the business may differ from the contracted deal that was negotiated when the telecom services were first acquired. This error – especially if the difference is relatively minor – can continue unbeknownst to the client for months at a time. Keen and meticulous oversight of billing statements is needed to spot this error.

4. Unnecessary Surcharges

Surcharges on services that should be included in the contracted plan are sometimes added to an account without the client’s knowledge. Surcharges related to limits on data transfer, available phone lines or long distance use could be tacked onto the monthly bill. These additional fees unreasonably inflate communication costs, and unfairly penalize the client for using services to which he should already be entitled. Knowing what’s in your contract is important here and keeping on guard for any additional fees.

5. Cramming, Slamming and Modem Hijacking

The most unethical of billing errors is the intentional altering of the agreed upon terms between the client and provider. ‘Cramming’, as it is commonly called, involves additional fees that are unrelated to any actual use or services. The provider will select and choose additional ‘phantom’ services and amend them to the original contract. They may be labeled as a ‘Membership Fee’ or ‘ISP Service Fee’, but are in fact nothing more than boldfaced attempts to slyly bilk more money from clients. Occasionally the terms of the original contract are ambiguous and reserve the provider’s right to increase or otherwise manipulate future rates and options. A client must take charge and directly confront telecom providers that engage in this practice. They should ask their provider why they were charged those specific fees and attempt to have them removed.

”Slamming” is the practice of switching a telephone customer’s long-distance service provider to another carrier without the customer’s permission. In recent years, this practice has lessened because customers now have to go through a series of verifications to change their long distance service.

”Modem hijacking” is a variation on cramming. It occurs when software, usually delivered through a pop-up ad, is downloaded onto a business computer over the Internet. It then uses dialing software to reroute the computer modem to dial long-distance numbers. The fees charged for this can be ridiculously high.

6. Unreimbursed Refunds or Credits

Another error involves a late or absent refund or discount from a telecom provider. This occurs when billing errors have been brought to the attention of the provider, but the expected refund is not given. A special rate or discount reserved for business clients may likewise not be actualized. These delays and errors can be frustrating, increasing the animosity between client and provider.

The wide range of errors that can effect your bottom line, and the subsequent monitoring that preventing them entails, is a time and resource drain that is sometimes best managed by professionals who have the industry experience to know both the needs and demands that business clients have. Though it is possible for some small clients to adequately manage their telecom expenses on their own, for most the task is demanding. Effective TEM should not be relegated to beleaguered employees already busy with other daily obligations. Using experienced experts provides the peace of mind to focus on the more important task of successfully managing your business.

Once upon a time, movie night meant traveling to the local video rental store and surveying the aisles in hopes of finding the newest release in stock. Today, the combination of rental DVD delivery services like Netflix and movies on demand from your cable or satellite provider has created an entirely new and relaxing way to enjoy movie nights. The rental store is now literally at your fingertips. Netflix delivers DVDs by mail to subscribers via a rental queue created online. The greatest part of these new rental services is that there are no late fees. Subscribers pay a monthly fee for Netflix or a per-movie fee for on-demand services; back-end operations are handled by the provider. There is no more worrying about if the movie is in stock.

Telecom expense management (TEM) has evolved in a similar fashion. Enterprises that once used premise-based TEM software to handle telecom and IT expense management are now seeing tremendous advantages in utilizing Software as a Service (SaaS). By using on-demand TEM software, companies no longer have to be concerned with loading vendor billing data or dealing with the complex changes of vendor data formats. In the past this was a common cause of failures within premise-based TEM software solutions because it prevented companies from viewing data at the highest level of billing detail. With an on-demand TEM solution, companies can see their data loaded within 24 hours of it being received by the TEM vendor. Companies can then dedicate their full resources to analyzing their billing data rather than managing it. This stress-free solution allows companies to sharpen their focus on revenue-generating activities.

The Opening Credits – Implementation

Most Hollywood summer blockbusters feature action right at the start of the movie, immediately captivating the audience. In the same way, using SaaS for a TEM solution provides rapid implementation times, yielding a much faster ROI. Traditionally, companies with a premise-based software solution lacked necessary telecom expense management experience. Their TEM initiatives were prone to errors from the start – errors that were compounded throughout the course of the TEM program. Just like a summer movie that lacks innovative special effects or a great storyline, their TEM initiatives were doomed to fail from the very beginning. These premise-based TEM software solutions failed to deliver significant ROI after companies made a substantial investment.

The combination of expert knowledge and far less complex software installation can mean smoother transitions and a decrease in the need for troubleshooting. Furthermore, because there is less need for client participation from a technical standpoint during implementation, SaaS TEM providers can offer a project timeframe with a good degree of accuracy and configure the system specific to each company’s dedicated hierarchy. This benefits both clients and service providers by removing uncertainty in the deployment schedule.

In addition, scalability is never an issue. Companies do not have to purchase additional servers or hardware to increase the amount of data that is stored. More importantly, companies do not have to be concerned with developing new processes to handle new data feeds. That is handled by the vendor on the back end and is transparent to end users, allowing them to focus on analyzing data, disputing costs, or running reports.

Preventing Bootlegs – Data and Security in an SaaS Environment

We all know of Hollywood’s struggle to prevent bootlegs, an effort that entails deploying powerful encryption to deter pirating. In much the same way, organizations in the past were reluctant to have data stored offsite for fear of a security breach. With the advent of IPSec VPNs, this roadblock has been removed.

IPSec VPNs offer an extremely high level of data encryption, coupled with hardened data centers that offer economies of scale. Vendors routinely back up data and send it to an offsite disaster recovery facility. Uptime and disaster recovery services are built into SLAs, ensuring that the client can be up and running quickly and that the vendor adheres to the highest level of security standards. While it is understandable that organizations want control, the reputation and feasibility of SaaS depend on treating data with extreme sensitivity.

The Production – Maintenance

With an SaaS solution, any problems that do occur can normally be fixed faster because of the centralized nature of the service. Software-based solutions frequently require an onsite visit, which naturally delays any troubleshooting attempt. SaaS solutions circumvent this delay and reduce downtime. Moreover, SaaS solutions generally have 24×7 monitoring and management, meaning maintenance issues can be quickly and efficiently addressed because the majority of equipment is centrally located. To achieve the same service speed with a software-based solution would require a set of expert technicians onsite, and the resulting cost would most likely be prohibitive.

System upgrades can be managed more easily with an SaaS solution than with a software-based solution. The TEM vendor manages the upgrade and rolls it out when ready, making the transition pain-free. Furthermore, with an SaaS solution, operational expenditures are fixed and predictable, which in turn aids in planning cash flow. With software-based solutions, operational expenditures can spike unpredictably when issues occur.

Data Analysis – The True Blockbuster

The bottom line is that, in the world of telecom expense management, SaaS solutions allow businesses to concentrate on revenue-generating activities and areas of their business that they do well. In areas where their knowledge is limited – such as TEM — businesses can turn over the responsibility to vendors who have real expertise. Once an organization has implemented an on-demand TEM solution, they instantly gain enhanced visibility to their telecom spend and are up and running in a matter of weeks versus six to 12 months. This enables companies to begin analyzing their data to make more informed purchasing decisions and identify areas where more cost-effective services can be utilized. By using an on-demand solution, organizations are no longer struggling with loading data and maintaining systems, but instead spending time on true telecom cost control by drilling deep into data they never had access to before.

Just as Netflix and on-demand movies have changed the way we rent films, SaaS for TEM has pulled back the curtain for a next-generation TEM solution. TEM vendors can utilize their expertise in processing electronic data to provide companies with a truly comprehensive TEM solution that presents data accurately in a secure, easy-to-use interface. While software-based solutions provide companies with the comfort level of perceived control, a TEM environment offers true control, with the ability to analyze detailed data that can generate consistent savings. And that makes for the classic happy Hollywood ending.