What is Telecom Expense Management? Benefits, Cost, and Tools
After hours of combing through line items, discovering unused devices still on our plan, and identifying several billing errors, I realized our company had a serious telecom management problem.
This crisis moment led me down the path of implementing a proper Telecom Expense Management (TEM) solution, a decision that ultimately saved our organization over $300,000 annually and transformed how we handle our communications infrastructure.
Now that most businesses have become digital, or at least are using digital means to conduct operations, telecommunication has become one of their fundamental factors.
Although telecommunication via the Internet or normal phone calls is important, it is also a huge expense for businesses. To deal with this expense, companies rely on Telecom Expense Management.
In this article, I am going to discuss what Telecom Expense Management actually is. Furthermore, I’ll be covering its benefits, costs involved, and some tools that are used in the procedure.
What Is Telecom Expense Management?
Telecom Expense Management (TEM) is the process of managing and optimizing the costs involved in the telecommunication activities within a company or an organization.
Modern businesses rely on the Internet, mobile networks, and landline telephones to operate properly. Utilizing these services may not seem like a very expensive thing. However, large companies make thousands of phone calls and use thousands of GBs of Internet on a daily basis.
So, to deal with these bills, companies employ a proper Telecommunication Expense Management system along with some useful strategies to make sure that Internet data and other networks are used responsibly.
📍 FACTS
Companies that have a large communication infrastructure usually prefer hiring TEM services so that they can focus on their main business operations and let the experts handle the communication expenses.
Telecom Expense Management as a Service
Telecom Expense Management is something that companies can do on their own. They can have proper rules and guidelines about using telecom services and make sure there are no extra costs involved.
However, TEM is also provided as a service by many experts. Telecom Expense Management services take over your entire communication network and make sure it is completely optimized for expenses that are within your budget.
Benefits Of Telecom Expense Management
The most obvious benefit of Telecom Expense Management is cost saving. Besides this, TEM offers other benefits that you should be aware of.
Now, I’m going to discuss the details of all of these benefits below:
1. Cost Saving
TEM helps companies save a lot of money. It identifies unnecessary use of data and network services and makes sure they’re controlled properly.
Besides that, it helps analyze if there are any billing errors that are leading to extra expenditure for the company. Even fixing a small error or applying a small data usage strategy can help a company save millions.
2. Better Operational Efficiency
Another thing that Telecom Expense Management helps with is better operational efficiency. Handling telecommunication expenses is a complete procedure.
It involves making deals with telecom companies, managing bills, and optimizing invoicing procedures. With TEM, companies manage and optimize all of these procedures in order to gain better efficiency.
3. Less Downtime
Less downtime is, perhaps, one of the most underrated benefits of TEM. Downtime in telecommunication means the time a company spends without having access to proper communication.
There are different ways that Telecom Expense Management can help avoid any type of downtime. This process or service keeps on monitoring the whole communication infrastructure in real-time.
Whenever an error occurs, they report it to the administration so that proper precautions can be applied. Besides that, TEM keeps on making payments on time, which stops any telecom company from cutting the organization’s service.
4. Telecom Inventory Management
Companies usually use different types of telecommunication assets such as phones, network equipment, etc. TEM keeps an eye on the company’s telecom inventory to make sure these assets are being used the right way.
It also focuses on the fact that the company only pays for the assets that it is actually using. it leads towards cutting down extra expenses and keeps one benefiting from telecommunication assets while staying within the budget.
5. Compliance With Contracts
A company’s contract with a telecommunications service can be complex. So, TEM makes sure that the company is in compliance with the agreed contract.
For example, a TEM service can keep an eye on the company’s Internet data usage to make sure it’s not overused. Similarly, the service also keeps an eye on the telecommunication company to make sure they’re providing the quality and quantity of service that is agreed upon within the contract.
6. Better Analytical Reporting
A qualified TEM service can offer better analytical reporting. Reporting is extremely important because it helps the company understand how the telecommunication data is being used.
With Telecom Expense Management, experts create detailed and comprehensive analytical reporting so that the management can understand how the data and services are being utilized within the company.
Costs in Telecom Communication Management
The costs involved in Telecom Communication Management depend on different factors. If you’re handling TEM on your own, it’s completely up to you how much money you’re going to spend on it.
On the other hand, if you’re using a TEM service, the cost will depend on the service’s pricing plans. In usual cases, a TEM service will charge you in the following ways:
1. Percentage Of Spend
The percentage of spend method of charging is very common among services. In this method, an outsourced TEM service will charge you a certain percentage of the total amount you spend on telecommunication services under the company’s management. This percentage can be around 1% to 5% depending on the volume of spending.
2. Flat Rate Charges
It is a simple charging method that Telecommunication Expense Management companies use. In this method, the service will charge you a fixed flat rate for the services it provides. These services could involve invoice management and any other relevant services.
3. The Gain Share Model
It is one of the most beneficial and efficient methods that Telecom Expense Management services can use to charge you. In this method, the companies will take around 25% to 30% of the total amount that they helped you save from telecommunication expenditures.
4. One-Time Audit Payment
This method is usually used by companies that help you audit your overall telecom expenditures. The company will audit and identify how much money can be saved. Then, they take a certain percentage (usually 50%) of the money they will be helping you save.
Sometimes, the company will take 50% of the agreed-upon money upfront and then 50% when the savings are confirmed and received.
5. Per-Device Charges
Another charging method that can be used by a TEM company is per-device charges. In this method, the company will charge you around $2 to $8 for each device being used within the company.
It is a beneficial method for companies that have a large number of devices. That is because the per-device cost is lowered as the number of devices goes up.
Important Note:
The amount of money discussed in this section is a general estimation. These charges can vary from company to company.
Top 5 Tools For Telecom Expense Management:
Both TEM services and general businesses use different tools for managing telecom expenses. I’ve discussed the details of some of the major Telecom expense management solutions below:
1. Tangoe One Telecom
Tangoe One Telecom is one of the most widely used software solutions for Telecom Expense Management. A lot of companies are utilizing it to manage their telecommunication services and make sure they are not overspending on them.
This tool comes with several useful features. It allows users to keep an eye on their telecommunication service usage in real-time. Besides that, it also allows them to process and validate invoices easily.
Key Features:
- Real-time data management.
- Smooth invoice management.
- Easy inventory management.
- Efficient audit and optimization of resource usage.
2. Brightfin
Brightfin is a complete solution for people who want to manage their telecom expenses of the company easily. This tool helps with managing mobile, telecommunication, and cloud expenses in a streamlined way.
With this tool, you have a clear overview of the usage as well as the expenditures of the telecom services. Besides that, it helps with automating manual tasks so that people don’t have to put effort into manual labor.
Key Features:
- Simple handling of invoices.
- Simple and easy to use interface.
- Detailed analytical reporting.
- Manage expenses related to different telecom services.
3. Sakon
Another tool that I am going to discuss in this list is Sakon. It is also one of the top tools that can be used to make sure your company is making use of telecom services while staying within the budget.
Sakon comes with almost all the major features that a company needs for Telecom Expense Management. For example, you can easily automate the collection as well as the validation of telecom invoices. Besides that, it helps with eliminating billing errors as well.
Key Features:
- Easily eliminate billing errors.
- Track spending in real-time.
- Automate invoice collection and validation.
- Simplify chargebacks with global tax and rule support.
4. WinBill
Winbill is another useful tool that can be used for efficient Telecom Expense Management. It is provided by TeleManagement Technologies and is packed with some of the most useful features.
It helps people keep a proper track of the inventory of different assets. Another important thing that this tool can handle is recoveries and billing disputes with vendors. This software solution in your corner will always keep your telecom bills and invoices in line.
Key Features:
- Simplified budget management.
- Helps avoid late payment fees.
- Real-time data management.
- Simplified tracking of recoveries and billing disputes.
5. Upland
Last but not least, Upland is another useful software solution for Telecom Expense Management. It is actually a complete suite of tools that are all related to managing technology expenses.
With its TEM solution, you can easily manage your invoices as well as your inventory. Another thing that this solution helps with is managing contracts, and allows tracking and assigning costs clearly to different departments.
Key Features:
- Simplified inventory and invoice management.
- Efficient order tracking.
- Efficient contract management.
- Resolving billing issues.
Final Summary
Telecom Expense Management is more important than many people think. Since companies are using a lot of telecom services for business operations, they need to make sure that the costs involved in this are within their budget.
There are many TEM services out there that are helping companies with this expense management. In simple words, this management helps companies in tons of different ways, and TEM software solutions play a huge role in this.
People Also Ask
1. What is Telecom Expense Management?
Telecom Expense Management is the process of tracking, managing, and optimizing expenses involved in using telecom services.
2. What are Telecom Expenses?
Telecom expenses are costs involved in using different telecom services, such as the Internet and landline.
3. What is a TEM Platform?
A TEM platform is usually referred to as a software service that is dedicated to Telecom Expense Management.
4. What is The Goal of TEM?
The end goal of TEM depends on the company’s requirements. However, in general, its goal is to cut down costs so that companies don’t have to spend extra money on telecom services.
