Is TEM Dead? Telecom Expense Management: Only Part of the Solution

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1 Is TEM Dead? Telecom Expense Management: Only Part of the Soltion

2 OVERVIEW Managing the fixed and mobile telecom environment has never been more challenging. The environment is rapidly changing with new fixed and mobile technology constantly being added to the fold, and keeping pace with the change is a danting task. Costs are spiraling ot of control while organizations are tasked with accomplishing more with fewer resorces. Telecom departments across the globe are being directly challenged by senior management to redce costs and become more efficient while delivering more vale to the bsiness. This directive is spported by AOTMP research, as optimizing telecom costs is the top telecom management priority for many organizations Enterprise Telecom Management Priorities Optimizing Telecom Service Cost Improving Internal Workflow Efficiency Identifying/Mitigating Risks to the Organization Improving Internal Satisfaction With Services/Spport Increasing Mobility of Or Workforce Improving Policies and Procedres Improving Vendor Relations 4% 3% 8% 7% 12% 18% 48% 43% 44% 58% 61% 70% 69% 75% 0% 10% 20% 30% 40% 50% 60% 70% 80% Priority Activities to complete in 2014 Top Priority Single most important activity to complete in 2014 The cost redction objective oftentimes sprs immediate internal discssions regarding the implementation of a Telecom Expense Management (TEM) vendor soltion. The nderlying premise is that the vendor program will save significant amonts of money and meet cost redction targets. However, one critical qestion that is never asked is How did the organization s telecom expenses get ot of control in the first place? Is it simply a lack of cost visibility? Is it a resorce isse? Or, are there nderlying systemic isses within the organization s telecom management strctre, processes or policies that are actally casing the problem? This telecom management thoght leadership white paper ncovers why implementing a TEM vendor soltion alone does not answer the qestion, bt rather, shold be considered as part of a more comprehensive telecom management practice that ensres sstainable, long-term sccess. Copyright AOTMP. All rights reserved. 2

3 TEM PROGRAM VS. TELECOM MANAGEMENT PRACTICE STRATEGY TEM does a good job of providing technology and atomation to gain better visibility into the organization s telecom expenses and identifying potential areas for cost savings. Identified billing errors reslting in recovery dollars is a key ingredient to create the savings eqation. The adit savings are heralded; vale is measred by the amont of generated cost savings. However, the tre bsiness vale of fixed and mobile telecom management practices shold be measred in technical, financial and operational efficiency improvements, not hge financial recoveries cased by billing errors. Adit recovery savings shold be a one-time event; recrring recovery savings are a symptom of systemic problems. Immediate gains shold level off; consistent cost redction savings shold not be the norm. Best practice fixed and mobile telecom management strategy drives preventing large adit recoveries rather than identifying overspend after the fact. The vale proposition of a telecom management practice eliminates technical, financial and operational waste and the processes, technology and skills that prohibit nnecessary expenditres from recrring. Consider the smmary table below comparing a traditional TEM program to a telecom management practice. traditional tem program Focses on optimizing telecom costs Identifies and resolves billing errors Implements bsiness rles within technology to monitor and enforce certain company policies Utilizes carrier invoice details to establish baseline telecom inventory Telecom is viewed as a cost center by senior leaders telecom management practice Focses on optimizing all aspects of the telecom environment inclding people, processes, technology, services and costs. Determines the root cases behind why billing errors occr and implements soltions to prevent them from reoccrring in the ftre. Reviews all policies and procedres continosly. Identifies and resolves root cases for policy non-compliance. Establishes an effective governance strctre to ensre organizational sccess. Validates all assets and services sing many different sorces of information and techniqes inclding CSRs, invoices, contracts, line verifications and physical site inspections to establish a tre baseline of telecom inventory. Telecom is viewed as a strategic asset that drives bsiness growth. Copyright AOTMP. All rights reserved. 3

4 THE FOCUS OF A SUSTAINABLE TELECOM MANAGEMENT PRACTICE The key to telecom management sccess is to avoid singlar focs on ctting costs, addressed throgh the implementation of a TEM program. Rather, take a holistic view and approach of the environment and create a telecom management practice that is considered a center of excellence. There are many points of potential inefficiency within a telecom environment. Financial inefficiencies may inclde overspending on telecom services and inability to obtain the best contractal rates. Operational inefficiencies can inclde nprodctive internal workflow and ineffective or nonexistent policies, procedres and processes. Technical inefficiencies may inclde misse or ndertilization of existing technology or misalignment of implemented technology or services to bsiness strategy. Optimizing financial, operational and technical components of the environment provides the framework for tre cost control. A sond and sstainable fixed and mobile telecom management practice focses on areas that impact performance, prodctivity, best practices and retrn on investment to achieve global bsiness efficiency. The practice will address all areas of inefficiency, not jst the cost component. The following table otlines focs areas that reqire evalation and optimization to establish a trly sstainable telecom management practice. focs area WHAT IS IT? OUTCOME People Process Technology Services Costs The collective skill set and fnctional organization of knowledge workers The organization of end-to-end procedres designed as integrated processes that yield optimal prodction with nominal rework Bsiness systems atomating rotine workflow and enabling people to effectively and efficiently execte tasks and objectives Qality and accracy of vendor, spplier and carrier delivery performance Total cost of ownership measred by the bsiness benefits gained throgh fixed and mobile telecom services Alignment of resorce skills reqired to achieve peak performance and prodctivity Optimized fixed and mobile telecom management workflow and procedres that drive bsiness efficiency Optimized bsiness systems and software that are sed in fixed and mobile telecom management practices Optimized goods and services procred throgh the spply chain inclding fixed and mobile telecom network and infrastrctre services as well as managed and professional services Optimized total cost of ownership for fixed and mobile telecom services Copyright AOTMP. All rights reserved. 4

5 CHANGING THE PERCEPTION OF TELECOM MANAGEMENT For an optimal telecom management practice to exist, a shift in the perceived vale and contribtion of telecom to the bsiness mst take place. Unfortnately, telecom management contines to be viewed as a service delivery and spport fnction offering an avene for bsiness sers to obtain mobile devices, internet connectivity or telephone service to perform their jobs. It is commonly perceived as a cost center and treated like any other tility. When these perceptions exist, the vale and focs of telecom management becomes cost redction. A sstainable telecom management practice seeks to change these perceptions into one that views telecom as a strategic asset that is sed to drive bsiness growth. Unfortnately, only two in ten organizations have achieved this nirvana. how is telecom viewed by the organization? Its sole prpose is to provide telecom services and spport to internal sers 50% It s one of the first departments asked to redce costs 45% It s jst another cost center and treated like a tility 44% Its perceived vale is based largely pon the amont of cost savings generated 24% It s viewed as a strategic asset to the organization that can be sed to drive bsiness growth 22% 0% 10% 20% 30% 40% 50% Achieving this state reqires a transformation process, starting with a commitment and vision from senior leaders for telecom management change. From there, create and promote the bsiness case and execte on the strategy. Alignment of technical, financial and operational objectives is a key ingredient within the transformation process. The ltimate reslt is all parties involved in telecom management driving towards a common goal; to improve bsiness performance. Demonstrating telecom s impact on the bottom line is eqally as important. For example, correlating telecom investment to bsiness reslts, sch as annal revene or annal profit will enlighten senior management as to the positive affects telecom activity is having on the bsiness. The goal is to change the perception of telecom management from a bsiness enabler to a bsiness accelerator. Copyright AOTMP. All rights reserved. 5

6 CONCLUSION Many organizations measre the sccess of fixed and mobile telecom management activities by the amont of savings generated with a TEM soltion. In an optimal telecom management practice, telecom activities are measred by the contribtion to the company s bottom line in terms of sales, revene and profit. Look beyond aditing, cost savings and TEM programs to consider all areas that impact an organization s ability to effectively manage the fixed and mobile telecom environment. Transform the telecom environment from a cost center to a strategic asset sed to drive bsiness growth. Is TEM really dead? It definitely has a place within the spectrm of a telecom management practice, bt it is not a complete telecom management soltion. Organizations seeking to achieve tre telecom management excellence will think broadly and strategically abot how they get there. Copyright AOTMP. All rights reserved. 6

7 Athority On Telecom Management Practices AOTMP is an information services company focsed on establishing and maintaining high-performance, best-in-class fixed and mobile telecom environments. Partnering with enterprises and pblic sector organizations and their telecom vendors, the AOTMP Efficiency First Program ses information and analytics to drive efficiency, performance and prodctivity while significantly redcing costs. The Efficiency First Program is based on the Efficiency First Framework, a disciplined, best practice-driven approach to managing fixed and mobile telecom environments. Adoption of the Efficiency First Framework by an organization and alignment to the Framework by their telecom vendors allows organizations to take their telecom environment to a new level of performance far beyond standard aditing and telecom expense management programs to create sstainable, predictable short-term impact and long-term reslts. The Program contines to create vale is it evolves the telecom environment from an operating expense into a strategic asset that is sed to drive bsiness reslts. Bsiness and performance reslts are measred and monitored far beyond cost savings with Efficiency First ratings, performance indexes and certifications for the organization, its employees and telecom vendors who spport the organization. Organizations are measred in order to nderstand how they are performing today and what they need to improve to meet telecom management indstry standards in all key areas otlined in the Efficiency First Framework. Throghot the process, organizations work towards becoming Efficiency First Certified. Certifications indicate qality, efficiency, performance and vale to stakeholders, cstomers and the individals who spport the environment internally or throgh a telecom vendor. AOTMP s clients represent $23+ billion in annal telecom spend and inclde 100+ of the Fortne 500, small and medim bsinesses, pblic sector organizations and indstry sppliers. Copyright AOTMP. All rights reserved. 7

8 interested in research? Yo might also like these aotmp soltions... TOOLS & RESEARCH Gain access to AOTMP s sbscription-baed online resorce containing nearly 2,000 tools and resorces, based on indstry best practices, to drive flawless exection in yor fixed and mobile telecom environment. From financial to operational to exective to technical, the Tools & Research resorces will benefit yor entire telecommnications management team. ADVISORY SERVICES Utilize AOTMP s telecom management experts and advisors to help yo create a bestin-class environment, driven by indstry standards and best practices. Delivered throgh monthly teleconferences, advisory sessions partner yor organization with AOTMP sbject matter experts to examine indstry trends and topics affecting yor fixed and mobile telecom environment. From nderstanding the changing role of the CIO to determining best practices for maximizing performance and cost savings to nderstanding new indstry innovations, advisory topics are flly cstomizable and will provide yor organization with answers to real-world problems. Copyright AOTMP. All rights reserved. 8

9 interested in EVALUATING YOUR ENVIRONMENT? EFFICIENCY FIRST ENVIRONMENT ASSESSMENT A comprehensive review of yor fixed and mobile telecom environment Efficiency First Program APPROACH Efficiency First Environment Assessment Baseline & Optimize People Services Processes Costs Technology Apply Performance Management Strctre Benchmark Gap Score Improve Compare Transformation From a cost center to a strategic asset sed to drive bsiness growth Initial assessment determines the total financial opportnity Areas of severe inefficiency are identified Assessment of people, processes, technology, services and costs Determine gaps against best-in-class and indstry excellence Recommendations based on bsiness reqirements and indstry best practices Focs on short-term impact, long-term reslts Recommended actions prioritized based on financial impact, level of effort, bsiness impact and ROI Key Performance Indicators (KPIs) are established Comparisons made to competitors and market excellence Benefits of an Efficiency First Environment Assessment: Identifies yor most significant ROI opportnities and the qickest path to reslts Creates a baseline for establishing a sstainable program to increase efficiencies and redce financial waste Focses on people, processes, technology, services and costs to provide complete visibility into efficiency across yor fixed and mobile telecom environment Athority On Telecom Management Practices AOTMP.com research@aotmp.com Copyright AOTMP. All rights reserved. 9