Q: 1.What is Telecom Expense Management (TEM)?
A: 1. Telecom Expense Management is the practice of managing your telephone network in a way that makes most sense to your organization both operationally and financially. The best run communications networks have the right Telecom and / or Information Technology (I.T.) services for their organization competitively priced against market.
These services will need to be monitored and processed for payment on a recurring monthly basis in order to ensure that your organization continues to only pay for those services it needs and at costs that are contained and controlled.
It is the continuous process of acquiring the right Telecom and Information Technology services at the best prices relative to market and the discipline of maintaining these operational and cost efficiencies on a going forward basis that is Telecom Expense Management.
Q: 2. Why is Telecom Expense Management important?
A: 2. Telecom Expense Management is important because it is most often within the top three I.T. operating budget line-items within most companies. Neglecting to place proper focus on your organization’s communications network could translate to hundreds of thousands of dollars - or even millions - in excess costs in as little as a year or two for unmanaged services.
Q: 3.Which types of organizations most need Telecom Expense Management?
A: 3. Most enterprise organizations can benefit from Telecom Expense Management. For a smaller company with a monthly telecom spend of less than $50k, Telecom Expense Management software alone might suffice to augment the company’s expense management efforts. For mid-sized companies with a six-figure monthly telecom network spend, there will typically be an investment in TEM consultative services such as those offered by Source Loop.
And for larger companies with monthly telecom expenses in excess of a million dollars, it is not recommended that any company go without external TEM professional services support. There is simply too much to know, oversee and lose control of in terms of your communications network operations. And losing operational control is almost always synonymous with losing financial control. Again, each of these facets represents a side to the same communications network 'coin'.
Q: 4. When procuring new services, what - besides the rates - needs to be scrutinized very closely?
A:4 Your contract terms and conditions. Negotiating best practice terms and conditions is as important as driving rates to or below market. It’s very important that key terms and conditions be aggressively negotiated as these critical contract components will influence the degree to which your enterprise can effectively manage your vendors’ performance over the life of the agreement.
We will compare your organization’s key terms and conditions to the most favorable that presently exist for each respective vendor under serious consideration to date. We will then generate and provide a readout of current terms against recommended alternative language and recommend a negotiation strategy that will empower your organization to successfully negotiate the most competitive terms for your new agreement.
Critical terms and conditions that will be included in any benchmark study and compared to best practices: (1) Commitment: The structure, language and commitment levels will be reviewed; (2) Service Level Agreements (SLAs): The proposed SLA and its associated penalty language for failing to meet service levels will be reviewed; (3) Account Team Control: How empowered will your organization be to influence the assignment of the account team and customer support personnel?; (4) Annual Rate Reviews: Will your organization have the authority to force price reductions as the market drops?; and (5) Business Downturn Clause: Will your organization possess the authority to reduce the revenue commitment due to business downturns?
Benchmarking to achieve the most competitive terms and conditions is as critical to proactive communications network management as doing so for the most favorable rates.
Q: 5. Why do TEM firms appear to be more relevant these days than they did in the past, say, 10 years ago and beyond?
A:5. As technology capabilities continue to expand exponentially, the world continues to shrink and the competitive landscape for enterprise companies becomes more intense with each passing day. It’s more important than ever to maintain an effective communications network that is not excessively priced and a drain on your organization’s I.T. operating budget.
Couple the above reality with the ever fluid and dynamic telecommunications industry which is highly impacted by changes in technology along with the volatile market forces driving today’s current economic conditions and the message is clear: Technological change is accelerating at rates never seen before at an economic inflection point in history that is clearly the most volatile since the depression era.
These technological and financial realities drive home the realization that the stakes are higher than they’ve ever been at a time when I.T. network organizations are more exposed than they’ve ever been.
In the arena of enterprise Telecom and I.T network operations, it’s simply too easy to overpay today for subpar network communications. And what’s more, it’s just as easy to overpay for subpar service and not even realize the degree to which this is taking place.
Today, Telecommunications and I.T. network organizations need the requisite specialization to manage their networks properly while simultaneously reducing operations cost.
These trends relating to technology growth and the financial pressures of heightened global competition gave rise to this industry and make the Telecom Expense Management industry more relevant than ever in the present day.
Read more about the Source Loop approach and why feel we can offer your organization the partnership that it is seeking to gain greater Telecom / I.T. network visibility and control at reduced operational cost.
Q: 6. As CIO, I have other I.T. expenses in my communication network besides those strictly related to telecom. Can your firm help manage other types of I.T. expenses as well?
Yes. Source Loop provides IT Expense Management professional services for: (1) Software Asset Management; (2) Hardware Asset Management; and (3) Contact Center Analytics.
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