Telecom Expense Management (TEM): Difference between revisions

Telecom Expense Management (TEM) is a specialty financial discipline involving the application of systematic analysis to telecom service orders, inventory, bills and disputes so that the enterprise gets only the telecom services they paid for and pays for only the telecom services they get.

Significance of Telecom Expenses

Every enterprise uses telecommunications services such as telephone service to conduct business. Large organizations with thousands of employees in dozens or hundreds of offices also rely on an extensive internal telecommunications network to connect corporate telephones, computers, exchange data and enable video communications. Over the past 30 years, telecommunications has expanded in scope and complexity from classic local and long distance voice services to include private line, Internet, frame relay, ATM, MPLS and more recently wireless services. These networks are complex and the costs of these services often represent tens or hundreds of millions of dollars per year. On average, telecommunications account for three percent of an organizations' revenue^[1].

An association of TEM service providers reports that their members are managing over $31 billion of telecommunications spending on behalf of their service and software clients. ^[2]

Features of Telecom Expense Management Programs

TEM includes the following business processes:

Sourcing - of telecommunications services. In competitive markets sourcing telecommunications services can often mean acquiring proposals from a number of potential suppliers, qualifying their recommendations and choosing the winning bid.

Ordering, Provisioning and Support - telecommunications companies have extensive processes for ordering, initializing (aka provisioning) and assuring quality service operation through technical support services.

Inventory Management - involves the identification and status tracking of each telecommunications service.

Invoice Management - telecommunications service providers invoice their customers. For large enterprises this can mean tens of millions of dollars and hundreds or thousands of invoices each month. Processes to manage these commitments to pay and internally tracking these financial documents are important in avoiding expense of late payments or over-payments.

Usage Management - some services are billed on some usage basis, so the enterprise needs to track usage to be sure that the usage to be paid for is a legitimate business service request and is appropriate accounted for and approved by users.

Dispute Management - telecommunications service providers have extensive mechanisms for customers to dispute charges on their bill. This element of TEM programs require the management of these processes.

Business Intelligence - tracking overall TEM program results and reporting dispute outcomes are important to senior financial executives who typically sponsor and implement TEM programs for their business organization.^[3]

The complexity of telecommunications services and the resulting bills for services from the telecommunications companies also require a process that is Sarbanes-Oxley compliant, involves people with experience in the nuances of telecommunications operator billing and contractual practices and computer software that analyzes billing records for anomalies and errors. Many of these services are available as part of a services contract arrangement with Telecom Expense Management specialist consultants and software firms or are inherent features of the software from Telecom Expense Management software vendors. The ultimate benefit of Telecom Expense Management programs is lower expenses, fewer accounting or billing errors and rapid response to telecom accounting defects for more accurate financial payments and reports.

References

^ TEMIA - the Telecom Expense Management Industry Association is a non-profit trade group of 35+ TEM service providers
^ TEMIA
^ Gartner Research Report #G00156381 - "Cost Cutting by Telecom Expense Management Services", April 2008

External links

TMCnet.com TEM News Feed - News about TEM

[1] TEMIA - the Telecom Expense Management Industry Association is a non-profit trade group of 35+ TEM service providers

[2] TEMIA

[3] Gartner Research Report #G00156381 - "Cost Cutting by Telecom Expense Management Services", April 2008

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[2]

[3]

@@ Line 1: / Line 1: @@
 '''Telecom Expense Management''' (TEM) is a specialty financial discipline involving the application of systematic analysis to telecom service orders, inventory, bills and disputes so that the enterprise gets only the telecom services they paid for and pays for only the telecom services they get.
+== Significance of Telecom Expenses ==
-On average, telecommunications account for three percent of an organizations' revenue<ref>[http://www.temia.org TEMIA] - the Telecom Expense Management Industry Association is a non-profit trade group of TEM service providers</ref>
+Every enterprise uses telecommunications services such as telephone service to conduct business. Large organizations with thousands of employees in dozens or hundreds of offices also rely on an extensive internal telecommunications network to connect corporate telephones, computers, exchange data and enable video communications. Over the past 30 years, telecommunications has expanded in scope and complexity from classic local and long distance voice services to include private line, [[Internet]], [[frame relay]], [[Asynchronous Transfer Mode|ATM]], [[MPLS]] and more recently wireless services. These networks are complex and the costs of these services often represent tens or hundreds of millions of dollars per year. On average, telecommunications account for three percent of an organizations' revenue<ref>[http://www.temia.org TEMIA] - the Telecom Expense Management Industry Association is a non-profit trade group of 35+ TEM service providers</ref>.
+An association of TEM service providers reports that their members are managing over $31 billion of telecommunications spending on behalf of their service and software clients. <ref>[http://www.temia.org TEMIA]</ref>
-TEM includes the following 7 business processes:
-<li>Sourcing - of telecommunications services. In competitive markets sourcing telecommunications services can often mean acquiring proposals from a number of potential suppliers, qualifying their recommendations and choosing the winning bid.</li>
-<li>Ordering, Provisioning and Support - telecommunications companies have extensive processes for ordering, initializing (aka provisioning) and assuring quality service operation through technical support services.</li>
-<li>Inventory Management - involves the identification and status tracking of each telecommunications service.</li>
-<li>Invoice Management - telecommunications service providers invoice their customers. For large enterprises this can mean tens of millions of dollars and hundreds or thousands of invoices each month. Processes to manage these commitments to pay and internally tracking these financial documents are important in avoiding expense of late payments or over-payments.</li>
-<li>Usage Management - some services are billed on some usage basis, so the enterprise needs to track usage to be sure that the usage to be paid for is a legitimate business service request and is appropriate accounted for and approved by users.</li>
-<li>Dispute Management - telecommunications service providers have extensive mechanisms for customers to dispute charges on their bill. This element of TEM programs require the management of these processes. </li>
-<li>Business Intelligence - tracking overall TEM program results and reporting dispute outcomes are important to senior financial executives who typically sponsor and implement TEM programs for their business organization.<ref>Gartner Research Report #G00156381, "Cost Cutting by Telecom Expense Management Services", April 2008</ref></li>
+== Features of Telecom Expense Management Programs ==
+TEM includes the following business processes:
+<li>'''Sourcing''' - of telecommunications services. In competitive markets sourcing telecommunications services can often mean acquiring proposals from a number of potential suppliers, qualifying their recommendations and choosing the winning bid.</li>
+<li>'''Ordering, Provisioning and Support''' - telecommunications companies have extensive processes for ordering, initializing (aka provisioning) and assuring quality service operation through technical support services.</li>
+<li>'''Inventory Management''' - involves the identification and status tracking of each telecommunications service.</li>
+<li>'''Invoice Management''' - telecommunications service providers invoice their customers. For large enterprises this can mean tens of millions of dollars and hundreds or thousands of invoices each month. Processes to manage these commitments to pay and internally tracking these financial documents are important in avoiding expense of late payments or over-payments.</li>
+<li>'''Usage Management''' - some services are billed on some usage basis, so the enterprise needs to track usage to be sure that the usage to be paid for is a legitimate business service request and is appropriate accounted for and approved by users.</li>
+<li>'''Dispute Management''' - telecommunications service providers have extensive mechanisms for customers to dispute charges on their bill. This element of TEM programs require the management of these processes. </li>
+<li>'''Business Intelligence''' - tracking overall TEM program results and reporting dispute outcomes are important to senior financial executives who typically sponsor and implement TEM programs for their business organization.<ref>[http://www.gartner.com Gartner Research Report #G00156381] - "Cost Cutting by Telecom Expense Management Services", April 2008</ref></li>
+The complexity of telecommunications services and the resulting bills for services from the telecommunications companies also require a process that is [[Sarbanes-Oxley]] compliant, involves people with experience in the nuances of telecommunications operator billing and contractual practices and computer software that analyzes billing records for anomalies and errors. Many of these services are available as part of a services contract arrangement with Telecom Expense Management specialist consultants and software firms or are inherent features of the software from Telecom Expense Management software vendors.
+The ultimate benefit of Telecom Expense Management programs is lower expenses, fewer accounting or billing errors and rapid response to telecom accounting defects for more accurate financial payments and reports.
 ==References==
 {{Reflist}}

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