Why do some TEM implementations fail?

When enterprises signup to “TEM” Telecom Expense Management what they typically need is Telecom Category Management BUT unfortunately, after usually 3 years of wasted time, lots of frustration and money, learn they’ve purchased nothing more than an invoice billing engine that summarizes invoices that are deemed “ready for payment” with a breakdown summary of cross charge allocation.

Usually TEM companies do a great job of getting organizations hypedaround “how you’ll finally be able to understand your carrier invoices” and be in a position to “find savings.”  If you would like to understand how TEM generates savings, here’s a blog post on where the savings will come from.

An enterprise TEM purchase cycle typically goes something like this:

Year 1 “The Setup”

The Enterprise and TEM vendor work on gathering invoices, changing the bill to address to TEM provider, meetings held with TEM provider regarding program status. TEM provider working on finding those “savings.”

Result:Everything is setup TEM vendor found the low hanging fruit savings.  TEM vendor takes cut of savings high-fives and beers internally. 

Year 2 “That Clarity” TEM Vendor processes invoices:

Presents batch reports for accounting, enterprise pays.

Usually in month 18 TEM vendor meets with enterprise to discuss TEM billing cost “true up” a.k.a. now that we understand your invoices our cost to manage your billing isn’t $20 per line it’s $100 per “line.”

Result:After a few months of contract disputes the enterprise and TEM provider come to an agreement on the TEM solution costs.  No savings delivered, but invoices are processed and paid. Enterprise has spend data, line item count (because this is what your TEM vendor gets paid on) enterprise has pretty charts with pointless data provided.

Year 3 “The Confusion Begins”

Enterprise is confused why their telecom supplier spend continues to fluctuates monthly TEM vendor tries to present vendor spend numbers but unfortunately don’t provide answers to the fluctuation question.  Enterprise asks for inventory summary only to be sent a half-ass created inventory of bill data detail which is full of holes.  TEM vendors argues well our day one goal was to process and pay your invoices and we don’t have clarity from your team won hat any of this data is.

Result:Internal team pressured for savings reverts to internal hacks hires consultants and finds 20% – 30% in TEM waste management areas they thought the TEM provider was focused on.

Year 4 “Pissed”

Enterprise is now pissed off, still lacks transparency and is no better off than before.

Result:Boom! Enterprise issues TEM RFP, terminate TEM vendor on to the next solution.

Year 1 next TEM vendor hyping enterprise on savings and invoice clarity….

Vicious cycle right?  Or maybe this sounds familiar?

TEM “Telecom Expense Management” an industry term created to explain what some define as a way for enterprises to validate billing and inventory management that leads to “savings.”

Most businesses are looking for Telecom Category Management e.g.   An extremely tight, trust worthy, detailed network inventory source that is used by the enterprise to gain transparency that enables transformation of your IT network infrastructure. a.k.a. Euphoria.

Some ideas on how to get there…

Define what Telecom Category Management means for your business

• Begin with your network inventory and outlining the criteria that will be used to build a clear picture of your telecom network carrier services and physical IT Assets. We’re not talking about some bogus summary of information that no one understands either.  Here’s a blog post on how to manage a telecom inventory.
• Once you’ve created your inventory, a process must be defined for how you will keep this information updated such that your inventory remains fresh and can continue to be your trusted source of information. We’re not talking about establishing some hack spreadsheets or 4 separate systems either.

Buyer beware ** Most TEM solutions have “add on modules” be ready to fork over some more coin (It’s like shopping for a new car, to get everything you really need and want will cost you top dollar.)  For some organizations that have a “failing TEM” environment we’re amazed to hear “we have a TEM solution, but we don’t have that functionality turned on because it would cost more.”

• Established a mandate that all teams both internally and externally with your suppliers must use the application. Have clear outcomes of what happens if anyone is caught going outside of the mandate.  g. your contract is void or X% of company bonus or stock is loss.

Now that you have a trusted inventory source and a process for keeping the information updated,  the enterprise can manage their Telecom Category e.g. all remaining activities associated with category management:

Network Management: Performance analysis access and hardware maintenance and asset end of life asset tracking.  Identify looming network performance issues, and ensure your suppliers can respond with solutions to keep your network running smoothly

Contract Management: Pipeline renewal tracking, contract rate terms and commitments.  Service schedule SLA’s and KPIs

Supplier management:  Analyze your current vendors, spend, products, services and performance information. Develop a clear position to drive forward any plan or future state technology goals.

Network project management: E-Sourcing Initiatives, Track and manage projects, Contract management, inventory pipeline renewal management.

Finance:  Understand your stakeholder’s current P&L, budget constraints, overlaid with technology goals and factor your current financial position into the overall team savings goals and expenditure goals.

e-Sourcing:  Evaluate and Identify the best options for your supply chain which may include acquisition of new technology products, outsourcing or insourcing, or other alternatives such as joint ventures, brokering vendor partnerships or potential technology acquisitions.

Don’t get caught up in the hype or have a “follow the sheep mentality” about which TEM vendor you choose e.g. “no one ever got fired for using ________. “ Outline clearly what your enterprise needs to effectively manage your telecom category and procure a solution that does the job.