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Solving Business Process Problems with Telecom Expense Management |
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June 17, 2006
Solving Business Process Problems with Telecom Expense Management
By Mae Kowalke
TMCnet Associate Editor
At a recent Telecom Expense Management (TEM) event, Gartner analyst Eric Goodness predicted that the market for products and services helping businesses manage their telecom assets will climb to $1.5 billion by the year 2010.
To find out more about TEM, TMCnet spoke with Goodness and two other industry experts-one from Quickcomm (a developer of TEM software) and one from AT&T.
Solving Business Process Problems
At its core, TEM is really about solving problems associated with business processes, Quickcomm's CEO, Mark Evans, told TMCnet.
"TEM is really a business process change, and the software is an enabler," Evans emphasized.
Managing communications infrastructure-data and voice networks, PBXs, cell phones, pagers, wireless devices, etc.-is a huge job for enterprises. It's a job that requires incorporating TEM concepts into the enterprise's core business processes.
Specifically, Evans emphasized, enterprises need to deploy tools and develop strategies for breaking telecom bills down into their component parts, so those parts can be analyzed properly.
That means getting three key department involved: engineers (who keep the networks running and provision wireless devices), procurement group (people who negotiate contracts), and finance department (which receives and pays the invoices).
Unfortunately, in many enterprises there are major disconnects between those three departments. Those disconnects must be overcome if TEM is to be successful.
Paying for Services, Not Accounts
In the process of getting the engineering, procurement and finance departments to sit down at the same table, Evans said, an enterprise must achieve a key conceptual change about its telecom asset management.
That conceptual change is to think of money spent on telecom as paying for services, rather than paying for accounts. Services are the individual line-items on any telecom invoice.
"To make that match, you have to break the bills down to their component parts," he said.
That means being able to examine bills so the enterprise can see, for example, how much money was spent for a particular phone line or which specific calls were placed from that line.
"You can't do that on paper," Evans pointed out. Luckily, "all of the big carriers will provide electronic billing data if you ask them."
Analyzing that digital billing data is where Quickcomm's TEM software comes in-it allows all three key departments (engineering, procurement, finance) to manage telecom assets by pulling from the same data.
The Bottom Line
Of course, the purpose of all this is to save the enterprise money.
Without TEM, achieving truly efficient and cost-effective management of telecom asset isn't possible. That's because, in the past, enterprises simply paid each telecom bill as a single item, since that's essentially how it was delivered.
An example illustrates the danger of not looking at the details to see exactly what is being paid for.
Enterprise XYZ has 500 locations scattered across the United States. They close an office in Texas, but in the process fail to turn off the circuits for their telecom services at that location.
Because Enterprise XYZ as a whole receives one, lump telecom invoice, it keeps paying that bill without realizing that in the process it is being charged for circuits no longer in use.
Without TEM, it's easy for errors and oversights like that to occur.
"When you break down invoices into their component parts, you can compare them against the contracts you signed and make sure carriers are charging the correct rates," Evans said.
Quickcomm's TEM software automates the process, and errors come to the surface immediately.
Electronic Billing
A vital component of any modern TEM solution is the ability to receive telecom invoices electronically. As noted earlier, most carriers will provide the information in digital format.
As in many other technology-based industries, any discussion about format leads to a discussion about proprietary versus open standards.
"Carriers have been delivering proprietary format electronic bills for many years," Evans noted.
That presented a challenge to Quickcomm, which had to grapple with many different data formats in order to make its system viable. Fortunately, in the past few years there has been a move toward standardized formats for electronic bills.
Most big carriers now comply with the EDI.811 standard, maintained in North America by Telecommunictions Industry Forum, now part of Alliance for Telcommunications Industry Solutions.
Evans told TMCnet that there's a trend toward adding ordering functions to TEM software, and as a result "e-bonding" standards are being developed for that functionality as well. TCIF likely will be become the regulatory body for e-bonding in North America.
One of Quickcomm's goals is to drive the standardization process, because it will make the company's products more efficient, Evans noted.
The TEM Industry: All or Nothing
Examining the TEM industry as a whole, Evans said he sees two major trends worth noting:
- When it comes to choosing a TEM solution, most enterprises are choosing to go one of two routes: complete outsourcing or in-house purchase.
- Telecom carriers are beginning to offer TEM solutions, a trend that began in Australia ten years ago.
Goodness echoed those observations, noting that when the industry first took off, it was based mostly on a managed service model; that's now changing as more TEM applications are being either purchased outright or outsourced entirely.
In fact, Goodness said, many enterprises are now choosing to outsource even their ordering, provisioning and dispute management functions.
Goodness also observed the trend of system integrators and carriers entering the marketplace with their own TEM solutions. He sees this as a positive trend, one that validates TEM as an important function of any enterprise.
Carriers as TEM Providers
When it comes to TEM solutions, carriers are uniquely situated to provide enterprises with valued-added services and support, Eric Shepcaro, Senior Vice President of Business Development at AT&T (News - Alert), told TMCnet.
He explained that, because wireless and wireline services are becoming more and more integrated, carriers are in the best position to help enterprises manage their telecom assets as they migrate from traditional TDM services to VoIP.
AT&T, Shepcaro said, has taken a holistic view when it comes to TEM, believing that it will be beneficial for everyone involved if customers can purchase both services and the means to manage those services from the same provider.
During the past five years, AT&T has invested heavily in core billing systems and platforms in order to provide TEM services. The investment has paid off, Shepcaro told TMCnet.
For example, "we have had significant reduction in disputes," he noted.
AT&T's TEM Services
AT&T's online BusinessDirect portal provides the company's clients with TEM services including ordering, asset management, trouble tickets, and e-billing. Customers can use the portal to view and analyze their bills, and process disputes.
Today, Shepcaro said, BusinessDirect is used by more than 400,000 companies.
The carrier now also provides professional, multi-carrier services to help AT&T customers collect, organize, aggregate and simplify their telecom invoices.
"We analyze all of the usage and spending trends that the organization has," Shepcaro explained. That information is then used to help the organization optimize its telecom expenses.
Shepcaro noted that, in the process of developing its TEM services, AT&T focused on usability by incorporating open standards and Web-based interfaces.
Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke's columnist page.
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