NetGain Communications

Has a carrier sales representative ever pitched you on the benefits of a single invoice for all of your telecom services? This may sound convenient, but it often costs you in the long run. . .

The main reason is that a single invoice tends to obscure important details. Payment of the bill is done as a single item, as that is how it is delivered.

The danger is in not looking at the details to see exactly what is being paid for.

Let's say that your company has 10 offices around the country and decides to consolidate a few. In the process someone fails to have the telecom circuits turned off at one (or more) of the closed locations. This actually happens all the time.

As time passes everyone forgets. Because your company receives a single telecom invoice for all locations it keeps paying that bill without realizing that it is being charged for circuits (or other services) that are no longer in use.

Without TEM, it's easy for errors and oversights like this to occur. With TEM, the automated comparison of invoice details against the contract ensures that such errors come to the surface immediately.

According to a report by Gartner, more businesses are expected to outsource their TEM needs over the next two years to better manage one of their biggest expenses: telecom.

Gartner predicts that most companies will select outsourcing rather than buying software and attempting to manage it on their own.

One indication of how important TEM has become for businesses and the impact it has on their bottom lines: they spent $400 million in 2006 on TEM software and services. Gartner expects this trend to continue, with companies forecast to spend $1.5 billion by 2010.

Why so much spending on TEM? Telecom invoices are incorrect, so companies save money by finding mistakes. More cost savings are realized with improved visibility and control – making budgets more accurate and finance teams more productive.

Even when businesses get comprehensive call records from their IP and TDM voice systems and can process the data into a variety of management reports, they may not be getting all the information they need to control other aspects of telecom spending.

Although CDR/SMDR systems constitute a good first step in managing call costs, they do not take into account errors made by the service provider’s billing system. Nor do they match invoices to active inventory items.

Businesses that monitor telecom spending aggressively will likely benefit from TEM to reduce their total level of administrative effort and improve the usability of the information.

The comprehensive information available through TEM provides convenient, intuitive access to all service and equipment information through graphs and hyperlinks.

You will be hard pressed these days to find a salesperson, field service rep or executive who does not carry a company-provided cell phone or PDA. And, you will also be hard pressed to find a firm that monitors and tracks its wireless spend.

In fact, most managers appear to believe that sky-high cellular bills are a current and necessary reality of doing business. No doubt that mobility is essential to modern business but simply accepting ever increasing expense is not a given. Carrier invoices, simply stated, contain errors. Cell phones for former employees continue to be billed (and possibly are still being used by the departed employee), users are billed on incorrect rate plans and, many times expensive features and applications are mis-billed.

Eventually the company starts to feel the pain. With tens, hundreds or even thousands of employees relying heavily on cell phones and wireless devices, there is an urgent need to track this inventory and monitor bills for anomalies that may be inflating service provider invoices. TEM service provides visibility into mobile inventory and will alert you to improper usage and billing errors.

Major service providers offer telecom expense management (TEM) services of one kind or another. Such offerings purport to let customers monitor and track telecom expenses for their wireline and wireless services.

In other words, the service providers have a TEM service that charges their customers for tools that are designed to find mistakes made by their own billing systems - a humorous proposition - at best.

The services are marketed on the premise that they will help customers save time and money. Questions for clients to consider include: Why are the bills wrong in the first place? Why do they need to pay their supplier to validate or invalidate their own bills? Why will the accuracy of this service be any more accurate than the bill itself?

Protect your own interests... best practices demand an independent source for TEM information and analysis.

The Application Service Provider (ASP) model of the 1990s has given way to a more customer-driven Software as a Service (SaaS) model.

ASPs offered off-the-shelf client-server applications that were hosted from third-party data centers and accessed by customers over Internet connections. But a combination of factors eventually doomed that concept. Among them were poor performance and that the services were based more on what the provider wanted to offer than what the customer really needed.

More recently, the SaaS model has emerged, which promotes modular applications built from the ground up to work well over the Internet. Not only is performance greatly improved, individual components can be readily updated. This modularity also allows customers to pick what they want instead of pay for things they don't need.

SaaS provides organizations with turn-key solutions, like iTEMize, that can be implemented quickly, and without the infrastructure costs and ongoing administrative burdens of traditional applications.

On the heels of the Sprint Nextel merger, there was the Verizon and MCI merger, followed by the SBC and AT&T merger. In addition, CLECs have joined the party such as Paetec's acquisition of USLEC and Broadview's planned acquisition of ATX.

All this industry consolidation is justified in terms of bringing new efficiencies and economies of scale to users. Time will tell on that point.

But as these companies consolidate operations, there's the problem of melding different billing systems and retiring others. This can mean more errors on your telecom invoice.

Just one more reason to acquire a TEM product or subscribe to a TEM service . . .

One of the most convenient ways to reign in runaway telecom costs is to pursue a Telecom Expense Management program with a business partner with expertise in assisting clients and working with service providers. The Telecom and data networking industries speak different languages (telephonese vs. bits and bytes), which becomes more difficult to interpret when you start looking at service records and bills.

A quick overview on the basics. . .

An Inventory Management module lets you track all your network services and equipment -- wireline and wireless -- by user, location, and department.

With a Financial Management module you can find billing anomalies before (or after) you pay invoices and get important financial details, trends, and reports. It also lets you control who can pay bills and where costs are allocated.

You'll find many approaches to TEM, from hands-on consulting to self-serve applications you can access online. The good news is you can regain control of your budget with help from the experts.

The cost of telecom services is one of the biggest line items on the corporate budget. But more than 50% of companies do not know how much they spend on telecom related services, according to the Aberdeen Group.

You would be surprised how often your phone bills and Internet invoices contain hard-to-catch errors and outdated service information. . . costing your company wasted time and money.

So what's the solution? We'll be covering the essential tools you'll need to tackle this problem.