The reality is that many companies waste resources and overspend on their telecom expenses. TEM is a proven and efficient way to identify these overspending patterns, reduce waste, and create short-and long-term savings. And although it’s possible to run a TEM program in-house, it’s not always the best option. More about telecom expense management benefits below.
Analysts Opinions About Telecom Expense Management benefits and ROI:
- AOTMP research shows on average, fixed TEM programs generate 7.7% in annual savings and mobile programs achieve 9.4%.1
- Blue Hill Research states “Successful CLM practitioners can reduce direct communications costs by 15% or more while simultaneously reducing in-house labor to process invoices.”2
- The Technology Expense Management Industry Association (TEMIA) reports that initial hard-dollar savings can be as high as 15%, while cost avoidance against future spend can drive that number upwards of 30%.
Telecom expense management benefits
According to TEMIA, tracking ROI and building a business case for a TEM program addresses changes across four main categories:
- Telecom Savings – resulting from fixing billing errors, reducing spend
- Labor Efficiencies – reallocating resources to higher IT functions in light of automation, consolidation and help desk resources
- Indirect Savings – comes from improved policies, workflows, and decision making
- Security Compliance – enhancements and increased adherence to mobile policies resulting in decreased risks and costs associated with security breach
With most TEM programs, returns on hard-dollar savings typically start right at the beginning of the engagement. Year one will be where most of those optimizations and efficiencies will be discovered.
TEMIA has created a summary of potential savings based on their report:
|Savings Category||Potential Savings|
|Spending less on telecom services|
|Recovery of refunds for billing errors||2% – 15% of expense|
|Cost avoidance by reducing future spending||5% – 30% of expense|
|Automation, consolidation & helpdesk||FTE re-allocation to high-priority initiatives|
|Improved procurement policy, workflows and decision making||1% – 3% of expense|
|Security enhancements, global compliance, application of mobile policy and accounting rules globally||Likelihood of a breach X cost of lawsuit or penalties|
However, when calculating the overall value, it’s important to take the length of the whole program into account. Gartner reports that “Cost optimization, coupled with business process transformation and growing resources in digitalization, is a key focus for many large and multinational corporations which often seek ROI within two to three years for net-new contracts on TEM deployments.” 3
AOTMP: Research Paper – Going Beyond Invoices and Expenses, September, 2015.
Blue Hill Research: Research Paper – The Evolution of Communications Lifecycle Management, June 2015.
Gartner: Research Paper – Competitive Landscape: Independent Telecom Expense Management Providers, 2016