When The Aberdeen Group surveyed 116 Enterprises, and asked how much of their telecom spending they had "under management", more than half of the respondents said that they had less than fifty percent of their cost centralized. When asked what their greatest challenge was, nearly 60% responded that it was a lack of visibility into what they were spending and why. When asked what their strategies were for successful Telecom Spend Management, the top five strategies all pointed to the benefits of gaining increased visibility into spending. And yet in spite of the best intentions, Aberdeen reports that automation and integration (keys to gaining control and visibility) were not even among the top five initiatives over the coming year. Spend Management efforts ranked 10th among the top 15 major cost-cutting initiatives.

Paying telecom bills is not exactly rocket science, but… It is one of those areas where enterprises have historically struggled. Successfully scaling to the velocity and volume of end-user telecom requirements is tough. When organizations lose the ability to effectively manage inventory or invoicing they also lose substantial visibility into what they are spending and why. For many organizations with limited resources and bandwidth, it has been easier to leave broken processes in place because of the pain of process retrofitting and centralization is pretty daunting. The problem is that Telecom costs represent a very significant percentage of total indirect spending in most enterprises. That alone makes it an important area of concern for Sarbanes-Oxley compliance. But as importantly, poor visibility into spending impacts the bottom line in every way: Sourcing; Ordering; Auditing, Allocation and Budgeting. There are very practical, even urgent reasons to establish solid controls and greater process efficiencies. That is hard to do when you’re trying to put out fires on a daily basis. Paying telecom bills is not rocket science but gaining and then maintaining effective control over enterprise-wide spending is a significant challenge for most enterprises. The "buzz word" is Telecom Expense Management". It is an emerging industry focused on helping companies come to grips with both inventory and invoicing volumes by offering substantial process automation and solid reporting. To be honest, we have never liked the term. The word "expense" suggests a reactive posture: "These are the invoices that I am paying on a monthly basis". It suggests management of invoices rather than management of inventory and budget. We prefer the term "Telecom Spend Management". The phrasing suggests a more proactive relationship where leadership is standing on firm ground, possessing both the visibility and the leverage to make smart choices, prior to signing a contract, prior to ordering new services, prior to paying the bills. So while these products and service can be part of a rigorous program of managing telecom costs, we think it takes a bit more work to reach the controls necessary to really drive down costs permanently and make smart decisions on a daily basis. TeleFirma has over twenty years of practical experience in Telecom Spend Management.

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