Communication Service Providers
Why managing telecom and cloud expenses can be challenging
Managing telecom and cloud expenses can be complex, especially in the evolving communications sector. As cloud services integrate with traditional telecommunications, businesses are navigating a hybrid environment that blends on-premises systems, cloud-based communications, and legacy infrastructure.
As businesses increasingly rely on both telecom and cloud services, the complexity of managing these expenses can lead to inefficiencies and unexpected costs.
Telecom Expense management challenges
Telecom expense management consists of various activities such as service provisioning, contract negotiations, and invoice reconciliation. The rapid advancements in telecom technologies, integrated with mobile and IoT devices, have significantly increased the complexity of these processes. Businesses navigate several key challenges, including:
- High Capital Expenditure: The telecom sector requires substantial capital investment for infrastructure development, especially for deploying advanced technologies like 5G and fibre-optic networks. This significant expenditure can strain finances and increase debt levels. However, effectively managing these expenditures is essential to ensure long-term sustainability and maintain industry competitiveness.
- Complex Billing Structures: Telecom billing processes are often highly complicated, characterised by lengthy invoices that hide the actual costs. Billing errors, such as incorrect rate applications or missed discounts, can lead to significant overspending. Research shows these errors account for 5-12% of telecom expenses. This makes it essential for businesses to implement thorough audits to identify discrepancies and ensure billing accuracy.
- Multiple Carrier Management and Mismanagement: Enterprises often engage with multiple carriers to fulfil diverse communication requirements across various locations. This fragmentation can lead to inconsistent pricing, challenges in comparing service quality, and increased administrative overhead. Additionally, managing these relationships effectively requires comprehensive oversight and strong negotiation skills to secure favourable terms. Poorly managed contracts can lead to significant overspending on telecom services. Organisations often fail to review contracts regularly or benchmark pricing against current market rates and missing opportunities for savings through negotiation or service consolidation.
- Legacy Systems and Services: Many companies continue to rely on outdated telecom services that are often not cost-effective. While identifying and migrating from these legacy systems is crucial, the process can be challenging due to the complexities of transitioning services without disrupting daily operations. According to a study, network modernisation can result in substantial savings. This modernisation not only minimises expenditures but also enhances overall operational efficiency, saving organisations millions eventually.
Cloud expense management challenges
In parallel with telecom expense management challenges, businesses face several challenges while managing cloud expenses as well:
- Unpredictable Expenditures: Cloud services come with a dynamic pricing model, making budgeting challenging. Businesses sometimes exceed their planned budgets due to variable consumption patterns or unexpected service demands. According to a study, cloud bills surpass budgets by 13%, highlighting the need for precise forecasting and monitoring tools.
- Multi-Cloud Complexity: Many businesses adopt a multi-cloud approach, which can be challenging and complicate expense management. Every cloud provider has different billing patterns and metrics, making it challenging to consolidate and analyse expenditures across platforms. This complexity requires sophisticated cloud expense management solutions for tracking and managing expenditures across multiple cloud environments.
- Security and Compliance: In the cloud, managing data security and regulatory compliance is paramount. It requires continuous audits and the implementation of rigorous controls to ensure data protection in line with compliance requirements and relevant regulations. Organisations must establish robust security protocols, including encryption, access controls, and continuous monitoring to safeguard sensitive information. Additionally, staying updated on regulatory requirements and industry standards is essential to avoid legal issues and ensure that operations align with best practices.
- Resource Waste: Inefficient resource allocation can result in significant cloud spending. Over-provisioning occurs when teams misjudge the resource requirements for applications based on previous on-premises usage, leading to the allocation of additional resources and unnecessary costs. Additionally, without proper monitoring and optimisation, organisations may continue paying for underutilised services, further increasing cloud expenses.
How can Infosys BPM help?
Managing telecom and cloud expenses involves navigating a landscape filled with complexities and challenges. Infosys BPM helps businesses outsource their cloud and telecom expense management through a managed services model (CTEMS). By leveraging CTEMS, enterprises can streamline processes, enhance visibility, and optimise spending, ultimately driving operational efficiency and financial sustainability.
