Maximize Telecom Savings with TEM Business Process Outsourcing

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1 Maximize Telecom Savings with TEM Business Process Outsourcing As telecom expense management (TEM) continues to provide significant savings to the enterprise, organizations are considering business process outsourcing (BPO) to maximize telecom savings and improve efficiencies. By relying on a TEM provider to manage all or some aspects of TEM, organizations can streamline their business and re-focus internal resources on more strategic activities. This whitepaper highlights the value of business process outsourcing including TEM activities that can be outsourced, considerations for choosing a partner, and ways to make outsourcing work for you. Copyright 2010 Telesoft

2 Table of Contents Introduction... 3 Is TEM Outsourcing Right for Your Organization... 4 Consider the Options... 4 Choosing a Partner... 5 Establishing a Winning Plan... 5 A Case Study in TEM Business Process Outsourcing... 8 The Challenges... 8 The Results... 8 Conclusion... 9 Next Steps... 9 Free Telecom Cost Savings Analysis... 9 Page 2

3 Introduction As telecom expense management (TEM) continues to provide significant savings to the enterprise, organizations are considering business process outsourcing (BPO) to maximize telecom savings and improve efficiencies. By relying on a TEM provider to manage all or some aspects of TEM, organizations can streamline their business and re-focus internal resources on more strategic activities. Common outsourced TEM activities include: Telecom invoice processing Telecom dispute management and recovery Telecom order management Mobile order management and help desk Telecom Expense Management is one of the most effective methods for cutting millions in wasted voice, data, and wireless expenses incurred from overbilling, inefficient spending and processes. Many organizations find that they aren t performing all of the functions of a TEM program and don t have the resources to do so. Management of telecom expenses requires a rare mix of technical knowledge and automation. Companies should document their current TEM processes and determine goals and objectives for improvement. Common goals include: Identifying ways to control and reduce monthly service costs for telecom Reducing operational expenses associated with invoice receipt and processing Ensuring compliance with Sarbanes-Oxley financial accounting business rules Gaining a better understanding of telecom expenses and reporting capabilities (charge-back, data quality, trending analysis) This whitepaper highlights the value of business process outsourcing for telecom expense management including TEM activities that can be outsourced, considerations for choosing a partner, and ways to make outsourcing work for you. Page 3

4 Is TEM Outsourcing Right for Your Organization The benefits of outsourcing can be substantial. Aside from potential cost savings, there are other gains your business can make. Managers should ask themselves: Will it free up your business to focus on its strengths? Will it improve your efficiency or service? Will your business gain a competitive advantage? Business Process Outsourcing can bring flexibility, shifting fixed costs into variable expenses which will free up capital for other uses. This capital can provide the edge when adapting to changing market conditions. Some activities to consider for outsourcing include non-strategic activities or more complex tasks to access best practices and/or leading-edge technology. Outsourcing enables organizations to benefit by refocusing highly-trained staff on core business activities. Consider the Options It may be tempting to rush into outsourcing, but managers must take the time to determine what they really need. Finding the right service provider is critical. Also you must identify your core strengths. Evaluate which processes can be outsourced and the benefits of outsourcing them. Determine the real costs of doing work in-house, and verify what the Return on Investment (ROI) would be if it is outsourced. Also consider the costs of not outsourcing. Will the business suffer because it cannot afford to invest in the expertise or the facilities that an outsourcing partner might provide? Outsourcing Checklist: Is this an area which your business does not need to control to ensure future competitiveness? Are you prepared to spend the time and energy that is required to manage an outsourcing relationship? Are you able to set realistic expectations? Will the gains be worth it in the end? TEM Processes You Should Consider Outsourcing: Telecom invoice processing Telecom dispute management and recovery Telecom order management Mobile order management and help desk Page 4

5 Choosing a Partner Managers should realize that choosing a company to manage outsourced functions is very different from choosing an ordinary supplier. This is a long-term relationship, so it is best to carefully select a provider. A successful outsourcing engagement will create a positive partnership for mutual benefit. Checklist for Choosing a Partner What is the provider s past record of service and commitment? How responsive and effective is their approach to dealing with problems? Does it track customer satisfaction? Can the provider grow to meet your future needs? Is the provider s business expanding? ( Is it growing too fast?) How good is the Service Level Agreement (SLA)? How will your account be managed? What are the credentials and past experiences of your account manager? What are the strengths and weaknesses of the provider? Are there any unique value-add areas that they bring to the program? Visit each potential outsource partner onsite, where they perform similar functions for other companies, to see them in action. Inquire about the outsourcer s staff retention and turnover. Check their IT systems and verify their processes and procedures with flowcharts and explanations for how they will perform the functions that your team is currently performing. Also check the financial stability of the firm. If they plan to subcontract any work, apply the same checks to the subcontractor. Establishing a Winning Plan Build the Business Case Know your limitations, strengths and weakness. Managers should take all the time they need to develop a business case for TEM outsourcing. Set the expectations from the outset. Be careful outsourcing overseas as it can be fraught with difficulties. Distance and different time zones will make control difficult. Language and business cultures can also present problems. Finally, allow for foreign exchange fluctuations in your cost model for non-us operations and outsourcers. Page 5

6 Choose Wisely Organizations should choose carefully and prepare to work closely with the company they select. Communicate openly at every stage of the process with all parties involved. Don t let the goal of having things perfect be the enemy of the good which is better than what is currently in place. Be clear about the terms on how you will be working together and address all of the issues before making a final selection. Aim for a smooth transition and implementation. Your staff will have concerns about their own jobs, so keep them informed. Establish regular communication within your company. The supplier is responsible for the process, but you must plan to set aside resources that will actively manage the supplier relationship. Identify the person that will be your primary liaison to represent your interests and identify who their primary contact will be to manage the relationship from their side. Switching suppliers can be a lengthy process so commit to building a long-term relationship from the onset because you are likely to get the best results if you can stay with your supplier for several years. Finally, remember that communication and flexibility is critical. Consider Service Level Agreements Contracts that are too rigid to accommodate changes should be avoided. At a minimum, the contract should set conditions that allow for updates. Create a flexible contract that benefits both parties. It should allow for innovation and reaction to changing circumstances. Even with solid planning, there will be a learning curve. Use it as an opportunity to modify the SLA for the future. You may need to renegotiate before the end of the term. Service Level Agreements (SLAs) ensure that you are interpreting the contract the same way. Misunderstandings will cause difficulties. SLA s should include the scope of the service(s) that will be provided, target performance levels, standards for the service(s), monitoring and reporting of service(s), and a delivery timetable for the implementation. Ultimately, there must be financial benefits for the program to achieve its goals. The SLA should include provisions that provide measures to track the success of the program. Other reasons for outsourcing are harder to quantify. In some cases, you can track the expertise brought through the program, but this should provide measurable results for things like fewer defects or faster speed to market. The SLA should also clearly identify the responsibilities of the supplier and the customer with a resolution process for disagreements. There should be provisions for legal and regulatory compliance with confidentiality and non-disclosure provisions. Page 6

7 5-Steps to Outsourcing Success Assess It Strengths and weakness: policy, people and process Identify quick wins Rethink It How and why you do everything Tweak It Try some controlled changes Implement It Perform a phased rollout Evaluate It Review the impact and make changes if needed Continuous improvement is the goal! Page 7

8 A Case Study in TEM Business Process Outsourcing The Challenges A large enterprise wanted to decrease global telecom expenses, increase operational efficiencies, and improve financial reporting by outsourcing telecom expense management. Their internal invoice management process was labor intensive, manual, and error prone resulting in late fees, insufficient data to perform accurate financial reporting, and high overhead. They faced several challenges including: Invoice approval was a manual error prone process. Tools that were used for auditing and verification of circuit charges, taxes, surcharges, and usage were limited. The databases lacked historical data and interfaces to financial systems and electronic billing. Application of general ledger coding, cost center allocations, contract rates, taxes and surcharges were often incorrect. Data was insufficient to perform accurate financial reporting and analysis in a timely manner. There were missed opportunities to recover refunds for billing errors. Fees were incurred for late payment penalties and uncontrolled service disconnects. The Results By outsourcing telecom expense management, they shifted internal efforts from manual review to exception tracking. This helped to increase audit refunds. They also avoided research and development costs that would have been necessary to build a similar system in-house. Key results from outsourcing TEM included: Paper bills were converted to electronic media and a single invoice format for all telecom service providers. Asset management software provided a database for better management of circuits with change control procedures, and online access to historical data. Automatic verification of static invoice line items, GL coding, cost center allocation, surcharges, and domestic and international taxes helped streamline labor intensive procedures. Reduced the time to process and approve invoices, which helped to eliminate late payment penalty fees. Improved financial, inventory, and usage reporting tools for budgeting, forecasting, analytics and an improved accrual processes. New service level agreements for internal business units enable the TEM department to demonstrate performance gains. They now have the time to develop more strategic relationships with vendors. Page 8

9 Conclusion Outsourcing telecom expense management provides many benefits to the enterprise. This hands-off choice is ideal for today s strategically lean organizations. If you want to realize the savings that come from Telecom Expense Management, but don t have key internal resources to manage it, rely on TEM experts. As an extension of your team, an outsource supplier will handle all of the labor and management required to reduce telecom costs. And, you get the savings and operational benefits without bogging down your staff or IT environment. Next Steps Free Telecom Cost Savings Analysis Telesoft is the trusted partner in Telecom Expense Management (TEM) software and services. For more than 25 years, Telesoft has worked with clients to reduce fixed and mobile telecom spend to improve their bottom lines. Let Telesoft help you uncover savings. In just 30 minutes we will: Show you how much you can save with telecom expense management. Pinpoint opportunities to lower your current telecom expenses. Provide a detailed report showing the savings you can expect in 4 major areas of telecom expense management. Telesoft Corp E. Camelback Road Suite 300 Phoenix, AZ Page 9

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