What is telecom expense management and why do you need it?

Managing telecom expenses has become essential in today's digital market. With several different carriers, services, and devices, businesses find it extremely challenging to track costs, optimize spending, and ensure that billing errors are rectified. Without a structured approach, telecom expenses are most likely to spiral out of control, rendering unnecessary costs and inefficiency.

Together with the Cybernews research team, I’ve conducted an in-depth analysis of the key features and benefits of telecom expense management to help businesses streamline telecom operations and enhance financial accountability. Did you know that besides automation and cost tracking, TEM platforms also house capabilities for vendor management and usage optimization?

In this article, you’ll discover what is telecom expense management, learn about various types of TEM providers along with their core features and benefits, and find out how to choose the appropriate solution for your business. Whether you’re a start-up, an entrepreneur, or an established multinational corporation, awareness of what a TEM service can offer you may make a huge difference in your daily operations.

What is telecom expense management?

Telecom expense management (TEM) is a strategic process in which an organization tracks, evaluates, and improves its telecommunications costs. As businesses grow, managing telecom expenses with various provider agreements and service contracts becomes difficult.

Without the proper management, companies may find themselves paying for services that they are not using and billing errors might go unnoticed.

With modern telecommunications expense management solutions, businesses can gain real-time visibility on their telecom expense spending. Through automation and AI, TEM systems track usage patterns, detect billing errors, and identify cost-saving opportunities.

Consider effortless invoice handling, contract management, and expense allocation the new standard and avoid overpayments and manual errors. With centralized billing, you can manage telecom expenses effectively, introduce tight budget control, and make the best use of your telecom investment.

TEM services come as software-only providers where you manage your telecom expenses independently, as well as fully managed service providers handling everything from invoice audits and vendor negotiations to cost optimization. No matter which service you choose, any TEM platform helps you to control costs and boost efficiency.

What are the different types of telecom expense management providers?

As far as TEM providers are concerned, their level of engagement in terms of managing telecom expenses needs to be taken into account by businesses. Generally speaking, TEM providers can be found in three different categories, each of them standing for a different level of automation, support, and custom services.

These are the most common types of TEM services you will come across:

• Fully managed TEM: A fully managed TEM provider handles everything from invoice auditing and monitoring the consumer's usage to the management of vendors. These tools are a great solution for companies with a complicated telecom setting like large enterprises or organizations with high telecom spend.
• Self-service TEM: These platforms leave automation, analytics-supported reporting, and monitoring to the user. Hence, you’ll be able to cut costs, identify bill irregularities, and efficiently manage all services independently. However, these tools are best for companies with smaller telecom budgets and internal teams capable of managing telecom expenses.
• Hybrid TEM: Hybrid TEM solutions deliver automated telecom expense management software that is backed by specialist support for telecom cost management. Examples include defining contract or billing terms up to vendor management and portfolio optimization. This option offers the best of both worlds and is more suited to mid-sized companies.

The choice of the right TEM provider depends on the size of your business, how complicated the telecom network is, and, last but not least, your availability of resources.

What are the key features of telecom expense management?

Telecom expense management solutions offer the much-needed tools and automation that allow the enterprise to retain control of telecom costs, optimize the management of these costs, and improve its operational efficiency. Read on to find a detailed description of the key features of TEM systems and their benefits.

Invoice management and auditing

TEM platforms automate invoice collection, processing, and validation to ensure businesses pay only for what is contractually permissible under legitimate circumstances. It cross-checks most billing charges against contracts, service usage, and previous billing data for errors, double bills, or unauthorized charges.

Better telecom expense management system tools automate dispute resolution as yet another mode to recover overpayments and make sure vendors will deliver on their SLAs.

Expense optimization and cost allocation

TEM helps in apportioning telecom costs across departments, projects, or locations. This way, companies can create better budgets, decrease wasteful spending, and refine service plans.

This significantly increases financial transparency within a company and reduces unnecessary expenditure.

Contract and vendor management

If managing many vendors is a pain for you, TEM is what you need. These platforms can keep contracts safely stored, monitoring vendor performance, and vendors' compliance with service-level agreements (SLAs).

This also means that you can get much better terms, as renewal alerts are a tickly reminder to your in-house team to get on their feet every time a vendor contract is up for renegotiation.

Usage monitoring and reporting

With TEM, everything can be monitored through real-time services and even dashboards where voice, data, as well as network service usage, is easily accessible. This information can then in turn be used to shrink wasteful spending while creating a more optimized design for actual usage.

AI-generated insights help to wall off overages and ensure the most efficient telecom usage.

Security and compliance management

Keeping track of telecom-related expenses with respect to industry standards and internal policies preserves the legal aspect of regulatory compliance. With TEM you prevent unauthorized telecom expenses and fraud and ensure the maintenance of proper spending.

TEM definitely has cybersecurity aspects, securing that telecom data retains its encryption and does not get lost in breaches.

What are the benefits of using a TEM service?

Using telecom expense management services can bring in considerable financial and operational savings for an organization. With automation, analytics, and oversight of vendors, telecom costs can be managed and optimized for enterprises. Here are the main benefits of telecom expense management:

• Cost savings: With a telecom expense reduction, a company can avoid paying too much by recognizing billing errors, duplicate charges, and unused services. In addition, AI-enabled cost-optimizing tools propose plans that are cheaper, thereby reducing expenses even further.
• Enhanced visibility: TEM platforms can provide real-time visibility of a company's telecom expenses for each department, location, and service. This way, businesses can decipher their spending behavior, manage budgets efficiently, and find areas to reduce costs. Real-time reporting offers decision-makers precise information to help them make informed choices.
• Improved vendor management: TEM platforms facilitate multi-vendor contract negotiations, track performance, and assist in the monitoring of SLA compliance. Businesses will thus find it easier to hold providers accountable, avoid auto-renewal of contracts, and negotiate better pricing and service terms.
• Automation and efficiency: Automation of invoice processing, cost allocation, and reporting makes managing telecom expenses much simpler. Thanks to automated workflows, time is saved, human error minimized, and internal policy as well as telecom contract compliance assured.
• Scalability: As businesses grow, so do their telecommunications, as they expand across sites, services, and devices. TEM services enable companies to scale without losing sight of costs since they adapt to changing telecommunications terms.

Telecom expense management vs. technology expense management: What's the difference?

Although telecom expense management (TEM) and technology expense management (TEMg) may sound quite alike, the truth is that they serve different purposes. While TEM deals with all expenses related to telecoms, TEMg takes a far wider outlook on encompassing all expenses related to technology – including costs related to IT infrastructure, cloud services, and software subscriptions.

Telecom expense management deals with all things telecom, including mobile plans, landlines, VoIP services, and network expenses. It seeks to enable businesses to track, audit, and manage their telecom expenses in a manner whereby invoices are in agreement with contracts and actual usage.

Apart from a telecom expense audit, these platforms also help companies in vendor negotiations and contract management and apportion the telecom cost to various departments or locations. For companies that are focused on telecom costs alone, TEM is a set of tools to reduce financial waste, identify billing mistakes, and optimize service plans.

Technology expense management, on the contrary, adds to the IT expenses along with telecom costs. This includes cloud services like AWS and Azure, SaaS subscriptions like Microsoft 365 or Salesforce, and even investment in IT infrastructure. TEMg platforms thus are able to provide a view of technology spending as a whole to allow firms to manage software licenses, control cloud costs, and demonstrate due diligence in the IT budget.

For organizations focused on managing only telecom expenses, traditional TEM solutions are usually enough. However, with organizations adopting cloud-based services, SaaS tools, and complex IT infrastructure, managing expenses across technology categories becomes difficult.

This is where TEMg delivers an end-to-end approach enabling organizations to have visibility and control over all technology-related spend and not just the telecoms.

How to choose the right telecom expense management solution for my needs

Choosing the most suitable telecom expense management solution for your requirements depends upon the size of your business, its telecom complexity, and the budget you can allocate.

As each provider has different service features, your specific requirements ought to be considered before making a choice. These are some factors to keep in mind when selecting a TEM provider:

1. Assess your business size and requirements. If the business consists of several locations, various telecom services, and significant telecom costs, a fully managed TEM service may be the better avenue. However, small companies with simple telecom needs may explore self-service platforms.
2. Identify your budget. From affordable low-tech self-service platforms all the way to fully managed services with high-cost features, you will find great diversity in the TEM market. Identify how much you want to spend and whether you want auto tools on the cheap, or apply expert management.
3. Look for integration capabilities. For seamless financial management, ensure the TEM solution integrates with your ERP, accounting, and IT management systems such as SAP, Oracle, or ServiceNow. Good integrations improve the accuracy of reporting and make cost allocation easier.
4. Check for security and compliance features. Your TEM provider of choice should have ample capabilities with regard to security like encryption, role-based access, etc. These precautions will protect sensitive telecom data and help ensure compliance with regulations.
5. Review customer support and SLAs. Ensure that the provider offers 24/7 customer support, and has clearly defined SLAs and flexibility in their contracts. A TEM service with proactive support and issue resolution means that your telecom costs can continuously be optimized.

Final word on telecom expense management

Managing telecom expenses can be complex and time-consuming, but it doesn't have to be – telecom expense management solutions arm a business with all the necessary weaponry to control costs, optimize operations, and increase financial transparency. Automated invoice audits, tracking usage in real-time, and vendor contract management are just some of the many functions offered by TEM to improve the financial efficiency of your business.

This research report on the major TEM solutions has provided a balanced view for companies on how they can optimize telecom costs through automation and control. You can choose solutions ranging from fully managed TEM services to do-it-yourself platforms, depending on what your budget and expertise allow.

Given the appropriate TEM system and strategy, organizations can eliminate unnecessary telecom cost outflows, display improved visibility of spend, and be able to hold vendors accountable.

FAQ