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Choosing a Telecom Cost Management Solution


Telecom Cost Management Featured Article

October 29, 2008

Choosing a Telecom Cost Management Solution

By Anshu Shrivastava, TMCnet Contributor

Voice, data and wireless services are keeping enterprises and mobile workforces connected. However, in recent years enterprises have begun to face an expanding set of problems managing telecommunications expenses.
Smart enterprises have deployed telecom cost management (TCM) solutions to handle and manage telecom-related issues and expenses in a simplified and effective way. TCM reduces telecom cost, lowers invoice processing costs, improves spend visibility to executives and business units, increases asset and service visibility and enables employees to refocus on important strategic activities.

The deployment of a TCM solution can be relatively straightforward for companies that have kept track of their expenses and inventory. However, choosing the right TCM vendor is vital to ensuring a painless implementation process. According to a June, 2008 Aberdeen report, “best-in-class” companies were able to implement a TCM solution in three months, whereas the bottom 30 percent averaged nearly a year. Enterprises that have set clear success-criteria for selection, expected product capabilities, and improvements are the ones that benefit the most from TCM.
While evaluating the viability of TCM vendors, successful enterprises look for a solution that matches their needs perfectly, and features inventory tracking, asset management, invoice processing capabilities, automated reporting, service order management, and billing exceptions.
There are five main criteria which an enterprise can use to select the best TCM solution vendor. These criteria are: solution application functionality; implementation, process and alignment; expertise; supplier financial health and future vision; and the overall program value and price.
Software forms the foundation for a successful TCM program, according to industry experts. Recent research shows that a majority of best-in-class companies have a software solution in place specifically for TCM. Even fully managed outsource programs need robust software to succeed. However, the real challenge is verifying capabilities and features of the program.
Company officials must ask the vendor to demonstrate and describe the solution’s ability to manage different vendor billing formats such as EDI, XML, CDs, and paper, and also the level of invoice detail imported from different carriers.
The program must be equipped with functionalities that support workflow for invoice-processing and provide time frames for alerts. They must also decode the process by which the system validates billing, tariffs, contracts, physical inventories, and more.
The application must reconcile carrier-billing with customer service records, special contract-pricing, tariffs, and inventory. The enterprise must compare options to find a program that will continuously monitor billing inputs to detect leading indicators of failure before the business faces an inaccurate telecom cost environment.
Enterprises seeking a solution always want to get good program value for the cost of the program. There are vendors that offer low-cost solutions but lack robustness value, and there are solutions that are overhyped and overpriced. It is important to check how the solution ranks in overall value and price and aligns with the business value that companies seek to bring to their telecom departments and to their enterprise communications deployment.
Enterprises are best off making a shortlist of three to four vendors and then compare the pros and cons of each. Some items to consider are whether there is a fee for each software license, whether the vendor will charge extra for tape processing, what level of business process outsourcing is provided, and how much the vendor is charging in maintenance fees.
There is a misconception about the speedy deployment of TCM solutions. Often, the process take a while because the vendor has to act as an intermediary between carriers and their clients to get information. Also, suppliers do not control everything involved in the implementation. Yet, best-in-class companies, representing the top 20 percent of TCM companies, are on average able to choose a vendor, sign a contract, and implement in 11 months. “Laggards,” by comparison, average almost 29 months.
The enterprise must select the vendor after considering the business processes, timeframes for deployment, and technical requirements when implementing the solution. The enterprise must also take in consideration the skills or knowledge sets of the vendor’s staff and product functionalities that differentiate the vendor from its competitors.
Moreover, there has to be a detailed implementation plan that has been developed for a particular enterprise’s requirements. Implementations with C-level involvement have a greater track record for success, since TCM implementations provide an opportunity to centralize enterprise-wide telecom spend and give better oversight over company-wide communications policies. The enterprise must also ask if the supplier’s approach aligns with the enterprise, whether the vendor actively invests in R&D and product support, and if the vendor has resources to monitor the program success
There are plenty of TCM vendors in the market and selecting the one that is not profitable can be quite risky. Once a solution is deployed, it’s often difficult to replace it with another. Prior to selecting the TCM solution, the enterprise must evaluate if the TCM solution providing firm is profitable and financially stable and its current rate of profitability or losses, and also if there is any venture capital funding involved.
The stability of the deployed solution is linked to the vendor’s future plans. It’s also imperative to know the firm’s future schedule that reflects ongoing investments and regular software releases. Finally, the enterprise must determine the roadmap of future capabilities align with its plans to implement new technology.

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Anshu Shrivastava is a contributing editor for TMCnet. To read more of Anshu's articles, please visit her columnist page.

Edited by Mae Kowalke

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