TEM - Telecom Expense Management
Stop throwing away money. Save up to 60% on all of your voice, data, wireless and wireline expenses on a monthly basis.
Overview: "What is TEM?"
Telecommunications
Expense Management (TEM) is the methodology by which organizations can
best manage one of their most critical strategic assets: their telecom
network. TEM encompasses the technology, processes, policy, and the
people needed. On the technology side, there needs to be a software
platform to help inventory your Telecom assets (e.g., circuits,
services, equipment, locations, invoices, accounts), enforce business
processes (e.g., ordering, approving, problem resolution), and manage
access to critical Telecommunications infrastructure information.
- The
processes are all the business rules, which govern how the network will
be deployed, managed, and eventually dismantled or converted.
- The policy is the corporate buy in and ultimately the enforcement of
the processes that will ensure the integrity of the TEM solution.
- The people are the experts in networking and telecom that follow the
methodologies and use the software to deploy, manage, and decommission
the telecom network.
TEM brings together silos of technology,
data, and people into one centralized and collaborative ecosystem where
all the participants are interlinked and ultimately different systems
can talk together: ordering talks to inventory, inventory talks to
billing, ticketing talks to inventory, network management talks to
inventory, network management talks to contract SLAs, etc. TEM also
brings a standardized set of best practice, repeatable processes to the
organization using it. All order and invoice processing should happen
the same way across the entire organization after a proper TEM solution
is deployed.
Things You Can Do With TEM
Once you have
all the technology, processes, policy, and people in place in your TEM
strategy, what types of things will TEM enable you to do to better
manage your operations, and start saving money?
* Maintain a complete and accurate inventory of every network element in
your company at every location. This includes every circuit, service,
computer, laptop, BlackBerry, cell phone, hub, server, wiring panel,
PDA, etc.
* Just in time provisioning: order only what you really need, only when you really need it
* Convert from old technology to new technology easily
* Assess the impact of the network on the company's bottom line
* Pay your bills on time and avoid late fees
* Validate the accuracy of your invoices
*Allocate costs back to the appropriate organization or department
* Allocate usage of the network back to the organizations that consumed the bandwidth
* Dispute invoice charges with the carrier
* Predict future network costs
* Build your telecom budget
* Identify weaknesses in your security infrastructure
* Optimize your existing network infrastructure
* Electronically bond with your service providers
* Understand the true costs of operating the network
* Negotiate better contracts with your providers
* Measure your SLAs internally and externally
* Analyze your Call Detail Reporting (CDR) from your invoices and your telephone switches
* Centralize all your telecom data into one single repository for doing data reporting, analysis, and business intelligence.
There are many distinct disciplines that are required to deploy a fully functional TEM initiative:
Inventory Management
The
center of the TEM universe is the inventory. You can't manage what you
don't know exists. It is critical for any sized business to have a
central repository of every circuit, service, router, PBX, cell phone,
order, invoice, card, computer, monitor, etc. It is also critical for
the organization to know how that inventory is configured, what its
purpose for existing is, and how it is related to all the other
inventory elements.
Order Management
Once
you have an inventory, it is critical to keep it accurate. The way to
do this is put in place a best practice, repeatable process to put
items into the inventory, change those items, and eventually remove
those items from inventory. Technology can really help in this area by
providing software-based workflow engines to enforce the company rules
for how these inventory updates happen. Not only will these processes
ensure the accuracy of the inventory, but they will also provide
business intelligence regarding the process: how it works, how it
breaks down, who is fast, who is slow, how long does it take, etc.
Financial Management
Financial
Management deals with the dollars and cents portion of operating the
network and allocating the cost of the network back to the various
users in the corporation. The simplest form of Financial Management is
paying the bills for the purchase/lease of various network assets.
Part of this process is to validate that what is being billed is
actually what is being used. In the telecom portion of the TEM space,
this means checking each line item from invoices and comparing them to
the inventory. Another part of this process is validating that the
amount being billed is accurate and this is accomplished by checking
the detailed elements of the bill against the configuration of the
telecom service, the tariff and the contract on a monthly basis.
It
is a well-known fact that corporations are spending at least 10% more
on their telecom bills than they should, simply due to the lack of
decent technology and processes internally to manage their telecom
invoices. This makes the Financial Management discipline of TEM one
area that can lead to some of the hardest ROI dollars for a company
implementing TEM. Most companies could easily payback the cost of a
TEM initiative within six months by reducing their telecom expenses by
only 10%. Newly found savings of up to 60% have been documented, with
a properly managed TEM solution.
The next part
of Financial Management involves allocation of costs. Once bills are
paid accurately, the next piece is to allocate those charges fairly to
the users or departments within the organizations. Allocation can be
straightforward in some scenarios. For example, the allocation of a
cell phone monthly charge is a simple matter of taking the entire
monthly charge for that phone and charging it back to the organization
of the person that uses the phone. In the case of charge back of
network utilization, this can be much more problematic. In this case,
your TEM solution needs to have access to network utilization
information that can be used to determine how much of a circuit is used
for what purposes. This example is one of the most advanced examples
of TEM allocation; however, it is an area that many Telecom Managers
should be looking at implementing over the years to come.
Contracts
contain the terms and conditions of the customer's relationship with
their carriers. It is critical to manage these contracts as you would
manage any of your corporate contracts. You need to ensure that the
terms and conditions are met by both parties. The most obvious entity
to manage as part of your contract is your price. You need to make
sure you are being billed the correct amount of money on your
contract. You also need to negotiate your contracts on a regular basis
to ensure that you are paying the best rates available in the industry,
at that time. What might have been a good price last year might be
only average or even poor price today. Finally, you will want to
manage your annual commitments, and your Service Level agreements.
Business Intelligence/Reporting
It
is one thing to maintain an inventory, pay bills or put processes in
place to ensure accuracy. It is totally another to take all the data
that is generated from following the TEM processes, and analyze the
data for the company's benefit. This is the role of Business
Intelligence in TEM. You need to harness the value of your data to
budget and forecast your total telecom spend. You can perform "What
If" analysis on network conversions or contractual terms, or simply
distribute out pertinent performance data about the telecom network and
its cost to all the consumers of those services that are paying for
them. Business Intelligence can also be used to measure the
performance of your telecom network by using Key Performance Indicators
(KPI) that will automatically alert managers when certain thresholds
have been exceeded.
Network Management
The
next piece of the TEM puzzle is the tie-in to network management
systems. This is the management phase of the inventory life cycle. On
a day to day basis, assets break, change, etc. The only way network
management systems can monitor the network is to know what is out
there, how it used, who uses it, etc. This goes back to importance of
the inventory. Network management can only be as good as the
inventory. In the network centric world that corporate America is
transforming into, it is critical to keep all network assets working 24
hours a day, 7 days a week. A single $500 circuit going down can cause
multi-million dollar losses for a company.
Incident Management
Network
Management systems identify potential issues that require resolution
from various organizations. Incident Management logs the issue, and
gets the problem into the hands of the correct person to resolve the
problem. Once again, the inventory plays a critical role in providing
the correct information to the person trying to resolve the problem.
The ordering information can play a huge role as well in case some
changes were recently logged on a particular piece of inventory that
might account for the incident happening in the first place. Another
side benefit of Incident Management is that organizations need to
measure their service level agreements to see how well the network is
performing. These service levels could be internally (for Ethernets
that might go down or slow down at certain times each day) or they
could be externally with Service Providers such as telephone companies,
wiring companies, equipment installation crews, etc.
Design and Optimization
Telecom
design is a very mature craft to seasoned telecom professionals. TEM
can leverage all the information in the database to help your engineers
design the highest performing network for the most economical price.
TEM will also provide timely information to provisioning staff as to
when capacity needs to be upgraded or downgraded. This is called "Just
in Time Provisioning". TEM will also be used to design future network
architectures supporting applications like VoIP or video that requires
inputs from multiple sources. Capacity Management is yet another
aspect of TEM. It is critical to manage the slots on your network
elements as well as over and under-subscription levels on Frame, ATM,
or MPLS networks.
Security Management
Security has
been a growing concern over the last decade, and it will continue to be
so as more wireless access is happening. You cannot have proper
security management unless you know every device plugged into the
network, what software it is running, when it was installed, who uses
the device, etc. This points to the importance of the inventory. The
installation process is critical as a repeatable process to ensure that
all devices plugged into the network get installed in the same way
every time. Verifying the correct security patches, turning off the
correct ports, making sure the passwords are secure is complicated
enough. Today, wireless devices create an entire new wrinkle into the
equation as devices can just "appear" on the wireless network. How
will people know if these wireless devices are allowed to connect?
Conclusion
We
hope that this overview of MTP's Telecom Expense Management is more
encompassing than perhaps other implementations of TEM you have either
attempted internally or outsourced to a third party. The bottom line
is this: you must perform all the disciplines of TEM to obtain the
highest return for your organization. MTP can help you reach your full
potential with TEM.
If we were to identify one of the most
critical elements that most TEM solutions miss, it would be the lack of
a clean inventory and a repeatable service order management process to
maintain the accuracy of the TEM inventory. This has led customers to
lower than possible returns on their TEM initiatives. For years,
experts have known how to identify invoice errors or negotiate
contracts, but only recently have people learned how to maintain their
inventories. We hope that you will sign up for our free 30 minute
webinar on TEM.
Let MTP save you money on all of your telecom and IT expenses. 
