An Introduction to Telecom Expense Management: More Complex Than You’d Think (Part 2)

Spend Matters would like to welcome Kevin Dunetz, a 20-year telecom veteran and co-founder of Rivermine (which Emptoris recently acquired).

I recently posted an article here on Spend Matters answering the question "What is Telecom Expense Management (TEM)?"

The next question I would like to answer is: "How do you go about implementing a TEM program?"

Your first step should be to determine if your organization already has an initiative in place. Different organizations categorize the TEM function differently, but certainly your CIO or CFO would be a good place to start your investigation. Telecom is a networking expense so it is more likely that your IT organization owns the TEM project. TEM can also be housed under the CFO's organization because of its financial benefits. One thing that is important to note is that TEM is definitely a cross organization application. You will have a higher success rate implementing TEM with buy in from IT, Finance, Procurement, and HR.

Assuming you find out that TEM is not being utilized in your company, your next step is to sell the project internally. Financially, the justification is pretty simple -- your ROI for almost any TEM solution is going to be multiple times what you invest. TEM always pays for itself. If you tell the CFO that you will give them at least 2-3 dollars for each dollar they give you to implement TEM, you should get no push back. The trick to selling TEM internally is to convince the stakeholders (i.e., members from IT, HR, Finance, and Procurement) that this change in business process will ultimately help them, their organization and the company. IT gets to use a new tool to provision the network, mobile devices, and maintain the inventory. The Finance organization will need to have ALL telecom/IT invoices routed to TEM first for processing and be prepared to receive an automated feed that will be routed into their ERP system (SAP, Oracle, etc.). Procurement might partner with the TEM provider to get access to specialized Telecom expertise. Processes will change and so will human resource allocation.

So now, let's assume that you convince the powers that a TEM solution will benefit the organization. You now have to convince somebody to own this function. My suggestion is to have IT own the solution. My reasoning is simple; although TEM ultimately helps save the company money, its roots are in managing the network and the inventory. The IT shop needs the tools to procure the correct network and maintain it going forward. The CFO/VP Finance will get the downstream benefit of having the Telecom bills easily analyzed, allocated, and paid on the back end, but they shouldn't own the function. The only caveat to this statement is that you might not get the buy in from IT to use the TEM solution. In this situation, the Finance group will most likely own the solution.

Once you have convinced the CIO/VP of IT and/or the CFO/VP of Finance of the need for TEM, you now find yourself in familiar territory. You need to source a solution. You will define your requirements and identify your vendors to include in the process.

Defining your requirements can be tricky business, especially if the stake holders are new to TEM. You might consider bringing in a consultant to help with this task. TEM has a lot of different flavors and configurations so somebody needs to sort out the best solution architecture based on the organization's needs. You should also probably do a solution overview with some of the top TEM providers. The TEM providers will educate your team on what has traditionally been most important to other customers of your size and industry. If you are a company that spends greater than $10M per year, you will most likely want to stick with the larger TEM providers that have more experience working with large amounts of spend or complex telecom environments. Gartner publishes a magic quadrant report on Telecom Expense Management. You can leverage this report to identify the top TEM providers.

After you have prepared your requirements and initial vendor list, you can probably proceed to RFP. You can build one from scratch or you can get samples from either TEM providers and/or Gartner.

In the next blog posting, we will discuss how to evaluate the TEM RFP responses.

-- Kevin Dunetz, Global and Emerging Markets TEM Expert, Emptoris

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