Telecom Expense Management Services, 2018 – Market Guide by Gartner
Large multinational corporations (MNCs) with more than $3 billion in revenue and complex telecom expense management (TEM) needs seek to control, optimize and drive efficiencies of their IT and communications costs, assets and services — representing almost half (44%) of Gartner's TEM-based end-user inquiries
Telecom Expense Management , TEM services provide enterprises’ IT, procurement and finance departments with the ability to order, provision, support and manage costs of large-scale corporate communications and associated IT services with their inventories (such as fixed and mobile telephony and data, cloud license tracking and emerging IoT connectivity).
In addition, they provide tools required for C-level technology strategic decision making. Gartner’s TEM coverage focuses on SaaS-based applications/platforms, managed services and associated professional services.
Enterprise communications and IT services continue to grow and evolve, driven by the use of video, cloud services, mobility, emerging IoT, consumption-based services and digitalization. Enterprises also evaluate TEM for traditional fixed and mobile capabilities, but also beyond. Increasingly there are moves by enterprises toward managed and outsourced services using cloud-based applications driven by digitization trends and IoT. This is because these services are aligned with the core capabilities of TEM consumption models (for example, price per unit or per use) and can be tied to similar enterprise assets within the scope of TEM offers.
TEM Services Beyond Fixed and Mobile
TEM vendors continue to evolve their offerings to include the wider spectrum of communications-related IT and cloud-based asset/licensing capabilities. That is in addition to full life cycle fixed and mobile expense, inventory management, and elements of IoT connectivity management.
The TEM market generates interest from large domestic, regional and multinational enterprises. Many enterprises struggle to rein in their telecom service spend, which globally represents 15% (over $514 billion year-end [YE] 2017) of global IT spend ($3,526 billion). From the traditional coverage of fixed and mobile communications services, enterprises now show an exploratory interest in the capability of TEMs related to cloud-based services such as UCaaS, infrastructure as a service (IaaS), platform as a service (PaaS), storage and IoT, all from a single platform. As enterprises digitalize, they seek better visibility and management of the usage, assets, inventory and services.
By employing a TEM provider, enterprises aim to save on internal resources while obtaining this overall view. Scaling will come from automating and outsourcing/managing the use of consumption-based services using the data to keep tight control and enforce policy.
Some vendors have rearchitected or built new platforms, such as Sakon, Veropath and Tangoe’s Atlas to encompass these areas into a single system. In addition, the power of data collection and analytics control purposes will continue to increase in importance.
Enterprise Moves to Outsourced and Managed Services
Trends toward digitalization will place even more pressure on enterprise resources and governance to control budgets and services associated with managing communications, cloud-based applications/infrastructure and emerging IoT services. Although many mature enterprises successfully manage their telecom and IT estates internally, complexity rises in proportion to deployments of these extended IT functions. New skill sets will be required and enterprises will find it challenging to manage a complete set of merged IT and communications-related costs and inventory over wide, distributed and complex environments.
Enterprise Requirements Vary by Size and Scope
Almost half of Gartner’s end-user inquiries associated with TEM come from large MNC enterprises with total revenue of more than $3 billion. Just under a quarter of those total inquiries come from large enterprises with more than $1 billion in revenue. Both of these groups typically have complex national and international expense management requirements.
For enterprises with international requirements, it is common practice for TEM providers to partner with other providers to cover a technical requirement or to complement geographic reach. Lately, there have also been several acquisitions to accomplish either of those two targets. Still, the competitive landscape remains fragmented. In addition to TEM providers, system integrators (SIs), outsourcers/business management firms (such as Accenture, Advocate, IBM) provide TEM services. Also communications service providers (CSPs) such as BT, Orange, Vodafone, AT&T and Telefónica are active through partnering and white- labeling. These provide ongoing audit and management platform capabilities typically using the software platforms from TEM providers.
Evolution of Procurement Practices — Managed Services Dominate
Enterprises can choose their TEM consumption model from several options ranging from basic SaaS bundles/services to fully managed TEM with additional business process outsourcing engagements as required. Other options include bundled or a la carte, depending on whether enterprises want to insource, outsource or pick-and-choose services.
While TEM for both fixed and mobile capabilities is foundational, it now incorporates life cycle management of telecom and other asset inventory; SaaS license inventory tracking, cloud usage, MMS integration or homegrown/acquired capabilities to IoT TEM. Gartner increasingly observes enterprises seeking a meshed and holistic solution covering these areas in one place. Most TEM services are bought as managed solutions, however some enterprises believe that basic control can be done in-house with the use of a self-managed platform (do-it-yourself [DIY]) and therefore buy it that way.
Vendors covered in this research and in the reviews are: Asignet, Calero, Cass Information Systems, Cimpl, Dimension Data, Ezwim, Icomm, MDSL, Network Control, Radius point, Sakon, Tangoe, Tellennium, TNX and Veropath.