Advice on managing telecom expenses and inventory

Dozens of software and outsourcing companies offer telecom expense and inventory management solutions to enterprise-sized companies, but according to an industry analyst, customers still have to do a lot of work to make sure they meet their organization’s needs.

“There certainly is now more than ever a need for good, solid TEIM practices,” said Forrester Research analyst and consultant Lisa Pierce, author of a recent study on how to select a supplier.

“The industry is still quite chaotic,” with many companies merging or buying each other, she said.

Which perhaps is one reason why Pierce says “they backbite like you wouldn’t believe. Which is why when I got through writing this report I took a very long bath.”

TEIM solutions compare an organization’s wireline or wireless contracts with the bills they receive to ensure accuracy. The contracts can cover a lot — not only basic phone and Internet, but cell phone, 1-800 service and long distance service. Rates can depend not only on the duration of service, but also the time of day. The complexity of these arrangements can cause billing mistakes, and as organizations add new services or switch to VoIP or multiprotocol label switching more errors can happen.

Companies with centralized telecom planning processes tell Forrester that billing errors can go as high as 12 per cent of their telecom budgets. So a number of vendors offer a range of TEIM solutions, from on-premises software to software-as-a-service.

They include Mississauga, Ont.-based Avotus Corp., Asentinel, Control Point Solutions, Quickcomm Software, Rivermine, TnT Expense Management and Vercuity.

But Pierce warns that these solutions are more than plug-and-play, and that telecom managers have to be sharp even after installation.

Take, for example, one of her clients, a major U.S. retailer with thousands of stores, which had two TEIM suppliers. It decided to cut down to one and put out a request for proposals from each.

“The responses we got back were like night and day” in terms of price, she said. The retailer was on the verge of picking one vendor before Pierce told the customer that the proposal it gave the suppliers dealt only with its current telecom use. It needed to have an idea of what its trend over a period of time has been so it could judge future needs.

It took one supplier two months to dig out the customer’s historical data. As a result, the other vendor got the contract.

Despite the sophistication of the software, Pierce also said telecom managers can’t assume it will catch everything. “You need to make sure the system looks at where the rubber meets the road,” she said, because some applications only look at bill summaries or check a small percent of bills for accuracy.

So after the software or service begins, she advises customers check results against detailed bills for a while until satisfied about the accuracy. Periodically, do deep dives into the data after that, she added.

Pierce also cautioned telecom managers evaluating TEIM suppliers not to shortcut the evaluation process. Be very clear on what functions are most important.

Standard reports generated by TEIMs, for example, are generally useless, her customers say, so make sure you get what you need or find out how much extra it will cost for custom reports.

She also advises making sure the capabilities the vendor offers match your expectations. It isn’t good enough if a vendor replies to an RFP that it “will or can comply” to a needed service.

“When somebody tells you they’re good at something, they should be able to back that up with a lot of references that you should check on,” she said.

Finally, she said customers shouldn’t be hasty in switching vendors.

“If someone has had a bad experience, don’t throw the baby out with the bath water. Realistically assess how much is the vendor’s fault, how much is yours, regroup and go after it again.”

Pierce offers the following checklist for evaluating TEIM suppliers:

– What’s their mode of operation: software licence, ASP or SaaS?

– What’s their service scope: wireline, wireless, domestic and/or international service?

– Who loads invoices? Can they take paper, CD-ROM, electronic data?

– Can they prove the accuracy of bill verification?

– How detailed are reports? Are custom reports extra, and if so how much?

– Are there well-developed interfaces to ERP and IT asset management applications?

– Does the software also inventory telecom and network equipment?

– Some suppliers outsource more day-to-day functions. Does that align with your company’s policies?

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