What is telecom expense optimisation?
Telecom expense optimisation is the ongoing work of auditing, controlling and right-sizing what an organisation spends on voice, data, mobile and network services, usually through a telecom expense management (TEM) programme.
Telecom expense management is a systematic approach to managing telecommunications expenses such as voice, data, and wireless services. This system leverages various processes and technologies to help businesses effectively manage and reduce telecom expenditures.
The primary goal of TEM is to minimise expenses while maximising the efficiency of telecom services. A well-implemented TEM system offers visibility across telecom expenditures, allowing organisations to track and analyse their spending comprehensively.
This sophisticated approach to managing telecom expenses helps organisations gain granular insights into their communications spending and identify opportunities for optimisation.
Telecom expense optimisation strategies
In telecommunications, implementing a TEM system is the first step towards achieving significant cost reductions. However, businesses can also strengthen their optimisation strategies by adopting several additional measures. The following are some key factors to consider. For a wider view of what drives enterprise telecom costs up, see our guide to telecom cost reduction.
- Vendor consolidation: Consolidating telecom vendors can simplify management and improve pricing. By working with fewer suppliers, organisations can negotiate better terms and pricing structures, enhancing service quality and minimising administrative overhead. This strategic approach streamlines vendor management and fosters strong relationships with key suppliers, enhancing service delivery.
- Embracing cloud services: Migrating to cloud-based telecom services can result in substantial cost savings. Cloud solutions often provide greater flexibility and scalability, allowing businesses to pay only for their usage rather than committing to fixed costs associated with traditional systems. By eliminating the need for on-premises hardware maintenance, businesses can significantly reduce their operational expenses (OPEX).
- Streamlining billing processes: TEM solutions can automate the entire billing lifecycle, from invoice receipt and validation to dispute resolution and payment disbursement. This automation reduces manual errors and ensures that all charges are accurate before payment. . At the heart of this is telecom invoice management: matching every invoice line against contracted rates and the live service inventory, so billing errors are caught and disputed before they are paid. By streamlining these processes, businesses can avoid costly errors that could impact their bottom line.
- Compliance and risk management: TEM systems help businesses maintain compliance with regulatory standards. By managing inventory lifecycles and enforcing strict approval protocols in telecom accounts, these systems reduce vulnerabilities and minimise the risk of financial penalties associated with non-compliance.
- Identifying cost-saving opportunities: Through continuous audits of telecom expenses, TEM systems can identify cost-saving opportunities that directly contribute to revenue protection. By identifying unused or underutilised services, businesses can perform telecom expense optimisation effectively, eliminating unnecessary expenses that could otherwise affect profit margins.
- Mitigating financial risks: In scenarios like mergers or acquisitions, TEM services play a significant role in ensuring that all telecom assets are accurately accounted for, mitigating the risk of revenue loss due to oversight or mismanagement during the transition phase.
- Facilitating better negotiations with providers: Detailed insights help businesses gain a better understanding of usage data and spending patterns. This allows businesses to negotiate better rates and terms with service providers. TEM systems enable businesses to leverage data-driven insights during negotiations, helping secure favourable contracts that align with their actual requirements. This capability not only reduces expenses but also enhances revenue retention and ensures that organisations do not overpay for services.
Telecom expense management best practices for implementation
Implementing a telecom expense management system is essential to optimise telecommunication expenses. To ensure a successful implementation, various factors should be considered, such as the following.
- Build an accurate inventory first: list every line, device, circuit and subscription with its owner, cost centre and contract before switching anything on. Savings depend on knowing what you pay for, and an incomplete inventory is a common reason audits miss waste.
- Integration with existing systems: Seamless integration with existing financial and IT systems is essential for a successful TEM implementation. This integration ensures data consistency across platforms and promotes efficient workflows. By associating the TEM system with Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems, organisations can streamline processes, reduce manual efforts, and minimise errors, thereby enhancing decision-making capabilities.
- Customisation options: Businesses should opt for TEM solutions that offer customisation options tailored to their needs. Flexibility in the system helps businesses adapt the TEM solution as requirements change over time. Customisation options, like setting up automated alerts for unusual spending patterns, configuring dashboards, or developing specific reporting templates, enhance user engagement and improve overall effectiveness in managing telecom expenditures.
- User training: Comprehensive training for staff on using the TEM system is crucial for getting the most out of it. Companies should invest in training programmes that provide employees with the necessary skill set for navigating the system, including usage monitoring, invoice processing, and reporting functionalities. Additionally, ongoing support and courses can help maintain user proficiency as the system evolves, ensuring teams are updated to leverage their full potential.
- Track a small set of KPIs: measure savings realised, credits recovered from billing disputes, cost per user or line, and invoice processing time, and review them every quarter so the programme keeps finding savings after the first audit.
How can Infosys BPM help?
Implementing a telecom expense management system is a strategic initiative that can significantly enhance an organisation’s ability to control telecom costs. Infosys BPM can help businesses with its Cloud and Telecom Expense Management Solution (CTEMS) to overcome significant challenges, unlock substantial cost savings, and ensure that their communication investments are aligned with their strategic goals.
Frequently asked questions
Invoices are best validated every billing cycle, ideally automatically, so errors are disputed while they are still recoverable. A full audit of inventory, contracts and usage is usually worth running once a year and again before any major contract renewal, when the findings carry the most negotiating weight.
At minimum: twelve months of carrier invoices, current contracts and rate plans, a list of active lines, devices and circuits, usage reports, and a mapping of each service to a cost centre or owner. Gaps in any of these are themselves a finding, since services nobody can account for are often the first savings.
The usual culprits are lines and subscriptions left active after employees leave, legacy copper phone lines and data circuits that are no longer used, roaming and overage charges, late payment fees, and taxes or surcharges applied incorrectly. Each is small on its own but adds up across a large estate.
In-house works when telecom spend is modest and the finance or IT team has time to audit invoices and manage disputes. Outsourcing tends to pay off for large, multi-carrier or multi-country estates, where a specialist provider brings audit tools, carrier contacts and benchmark data that an internal team would take years to build.
