Next Generation Telecom Expense Management

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1 IBM Software Industry Solutions Telecom Expense Management Next Generation Telecom Expense Management Expanding TEM Beyond Invoices to Generate Greater Value and Control for the Global Enterprise

2 Next Generation Telecom Expense Managementt In today s hyper-connected commerce environment, companies rely more than ever on the Internet, their telecommunications networks and mobile technologies to operate their businesses, meet customer needs and remain competitive. The number of communication channels between companies and their employees, their customers and partners, as well as the volume of information they exchange, has been growing dramatically. Workforces are increasingly more mobile and more distributed due to globalization and telecommuting capabilities, and the proliferation of consumer technologies has resulted in customers driving the development of new business models, including online and mobile commerce, which must be always on and responsive to customer needs. Companies are increasing their investments in their telecommunications environment; and few areas of corporate spending are growing as rapidly, and impact the business to such an extent. Thus, companies are increasingly anxious about gaining visibility and control over their global telecom infrastructure and spend. They are focused on reining in rampant costs, and addressing the growth of mobile devices and usage that is multiplying the management and security issues facing their IT departments. Telecom Expense Management (TEM), once a best-practice for large corporations, has become a necessary discipline to help organizations address these intricate telecommunications management challenges. A Framework for Best-in-Class TEM A best-in-class TEM program takes a holistic approach to managing the expenses and usage of fixed and mobile telecommunications assets and services, as well as related processes, in order to maximize efficiency and minimize the costs associated with managing the corporate telecommunications environment. A comprehensive TEM strategy must carefully consider and bring together the right technology, processes, people and policies to achieve success. As TEM has been evolving for more than 20 years and organizations are at varying stages of maturity in their adoption, there is a wealth of information and data on the best practices in telecom expense management. When corporations first began dedicating resources to TEM, they focused on the core activities of processing and auditing invoices to fix billing errors and identify cost savings opportunities. While invoice management remains to be a foundational element of TEM, the discipline has since advanced to include comprehensively managing a company s communications strategy and ensuring its effectiveness. By gaining holistic visibility into the entire telecom spend spectrum across business units, carriers, and service types, and control over processes, such as invoice management, inventory updates, order placement, and contract validation, organizations can bring extensive telecom spending under control and achieve significant savings. Best-in-class TEM can help companies optimize their wireline and mobile communications networks, provision network conversions and new assets, and manage mobile devices and expenses more efficiently. In addition, by automating and streamlining telecom processes, TEM facilitates increased staff productivity by allowing them to focus on further strategic telecom initiatives. This paper will examine the various stages of maturity of TEM programs and outline a framework for best-in-class TEM. 2

3 IBM Software Starting the TEM Journey Given the significance of managing telecommunications, every company can benefit from starting a TEM program. While the discipline encompasses many activities, there are two key areas of initial focus that can bring significant value: invoice management and inventory management. Invoice Management Many large organizations do not have an exact understanding of their telecommunications spend. This is partly due to the fact that they receive hundreds, sometimes thousands, of invoices monthly for their wireline and mobile telecom assets and services. Keeping an accurate and up-to-date inventory of telecom assets and services is a constantly moving target; there are thousands of corporate rate plans; and most carrier contracts involve complex terms and conditions. As such, invoices can be tens to hundreds of pages long depending on the type of asset or service. Of course, this makes manual processing an extremely cumbersome task. In addition, carriers have disparate billing systems and invoice formats, making the invoice management process even more tedious. The large volume and complexity of communications bills makes it difficult to normalize, aggregate and analyze expenses to ensure that the correct rates are applied for the right services and done so on time. This can be one of the most challenging activities, particularly for companies that are either expanding rapidly into more locations and hiring more employees or contracting and shutting down services. In addition, many companies rely on manual processes to maintain and update their inventory, which leads to a high level of inaccuracy. Companies starting a TEM program should consider adopting processes and technology solutions that can create and maintain a dynamic central repository of all their mobile, voice and data networking assets across the enterprise, such as circuits, switches, routers, and all mobile devices including cell phones, smart phones and tablet devices, as well as the services and costs associated with them. The inventory repository should provide granular intelligence about each asset by location, service type and business unit and be dynamically updated to ensure accuracy. A well-maintained, centralized and accurate communications inventory (a) provides holistic visibility of the telecom environment, (b) facilitates better usage analytics and bill validation, and (c) helps identify opportunities for optimization of costs and network design. Effective invoice processing and analysis gives organizations the ability to conduct audits to ensure on-time payments, reduce late fees, detect billing errors, and dispute erroneous charges, as well as identify opportunities for cost optimization. Companies who employ appropriate technologies to automate invoice acquisition, loading and tracking, and facilitate efficient approval processes, can ensure accurate and cost-effective end-to-end invoice management as well as gain better visibility across their wireline, data and mobile assets and services. Inventory Management Another key area for companies to focus on while launching their TEM programs is inventory management. As companies strive to ensure that they are paying for the right assets and services, the success of this effort depends on understanding their starting point: exactly what their inventory comprises. 3

4 Next Generation Telecom Expense Managementt Next Level TEM Building on Your Foundation A majority of Fortune 1000 and Global 2000 companies have embarked on a basic TEM program and brought a certain level of discipline to managing their key telecom processes around invoice and inventory management. This has provided them with preliminary efficiencies, as well as a first-line of savings. However, TEM is a continuous and iterative lifecycle process, and there is substantially more value to be gained by expanding the program to include other key telecom activities and introducing best practices. These activities include sourcing and contract management, ordering and provisioning management, expense management and advanced mobile expense and device management. Sourcing and Contract Management A best-in-class approach to improving a TEM program requires closer management of sourcing of and contracts for telecom assets and services. In nascent TEM organizations, sourcing may be done by procurement generalists with moderate expertise in the telecom category. There may be many geographically-dispersed carriers and contracts in place with little oversight of enterprise-wide telecom spend and little consolidation activity. In more advanced organizations, sourcing will be done by procurement specialists with moderate experience in telecommunications sourcing. They will have better visibility into overall spend by type of service, and will undertake some competitive bidding among carriers for larger geographies. Typically, a mature TEM organization will have a dedicated, specialist telecommunications sourcing team in place with a deep understanding of enterprise-wide telecom spend by carrier, geography, and type of service. They may employ purpose-built technology tools to conduct advanced sourcing events, including electronic bids and auctions, to selectively procure telecom services. A successful sourcing practice allows enterprises to secure the best contracts with carriers offering the most advantageous rates, and terms and conditions. A Fortune 500 medical supply company used IBM Emptoris Rivermine Telecom Expense Management On Cloud Managed Services to help them quickly support their complex requirements for their telecom environment, manage $15 million of annual spend, and rein in increasing telecom costs. Use of IBM Emptoris Rivermine Telecom Expense Management On Cloud managed services helped the company reduce their overall telecom spend by nearly $4M and achieve a 5X ROI within one year. IBM managed and provided support for 5,000 mobile devices with a set of mobile services including asset management and tracking, self-service telecom portal, mobile help desk, optimization Wireline services included conversion to electronic invoices, invoice processing and auditing, and dispute management. Ordering and Provisioning Management Another key process which organizations need to bring greater discipline to is ordering and provisioning management. This entails ordering and setting up network services and mobile assets. In many early stage TEM organizations, this function is undertaken by a generalist procurement department using manual processes, providing minimal provisioning support. The lack of automation makes it difficult to implement custom approval workflows and processes which address the specific needs of each internal organization and provide timely status updates to ensure internal user satisfaction. In moderately advanced organizations, this function is more streamlined, where some procurement activity is managed in an automated system, order approvals are tracked via and there are some help desk services provided to support the ordering and provisioning process. Mature organizations take a best practices approach to this function, assigning a specific telecom services team, utilizing a multi-tiered product and service catalog and an online telecom portal for entering new 4

5 IBM Software orders and tracking status. Approvals are automated with customized workflows, and advanced help desk services are available for additional end-user support. One of the key benefits to this approach is ensuring that new orders and terminations directly modify the inventory to keep it current and accurate. In addition, organizations can glean valuable business intelligence to identify delays and take corrective action to expedite the process. Expense Management While invoice processing is one of the core functions that need to be undertaken during the initial phase of a TEM program, there are other significant expense management activities that can be assumed to provide additional and substantial value, including managing usage and disputes across the organization. Managing usage by end-users, business units and office locations entails reviewing invoice data and employing call accounting practices to enable the allocation of telecommunications costs to designated departments. This ensures organizational accountability while identifying and reducing inappropriate telecom usage and potential fraud. In advanced TEM organizations with standardized processes, the intelligence acquired can also allow department managers to manage and temper usage based on benchmark information. Dispute management is the process by which organizations can challenge erroneous charges and recover fees from carriers. For organizations in the early stages of implementing a TEM program, this is an inefficient practice typically tied to manual processes. Mature TEM organizations have standardized systems and workflows to manage disputes with carriers, with reporting and analytics to track the status of disputes to ensure successful outcomes. Moreover, recent trends in the industry, such as the increasing practice of Bring Your Own Device (BYOD) are multiplying the management, data governance and security concerns of enterprise IT managers. As such, companies need advanced mobile expense and device management strategies and solutions to manage, track and optimize their mobile and wireless spend while ensuring that corporate mobile policies are enforced. In order to accomplish these objectives, companies need to centralize the ordering and provisioning activity and introduce appropriate approval processes to streamline the ongoing management of mobile usage. This can be achieved by using an online telecom portal that is tied to corporate approved catalogs and integrates standardized approval workflows. Telecom portals enable self-service ordering and tracking of telecom assets and provide managerial visibility and control of telecom usage. Companies can also achieve significant savings by proactively auditing and analyzing their invoices against usage to optimize rate plans. They also need to address growing end-user needs with the support of help desk services, which help increase the productivity of end-users. In addition, they should evaluate adopting Mobile Device Management (MDM) solutions, which help facilitate IT and application security policy management by helping accelerate time-to-resolution for device issues, provide support for individual-liable (BYOD) and corporate-liable device management, separate and secure personal and corporate data on the device, and enforce corporate mobile policies by controlling employee expenses and abuse. Advanced Mobile Expense and Device Management While all of the aforementioned TEM activities must also cover mobile assets, the unprecedented growth of mobile devices and usage in the enterprise has made it apparent that special attention needs to be focused on the management of mobile devices and wireless networks. 5

6 Next Generation Telecom Expense Managementt Comprehensive Communications Management Once companies have adopted TEM best practices and attained a high degree of sophistication with their TEM implementations, they can begin to place a more comprehensive focus on the management aspect of TEM rather than the pure expense element. At this stage, companies can embark on broader projects to assess their communications strategies in a way that will support the achievement of their critical business objectives. These projects may include transforming entire corporate networks to new technologies and holistically managing enterprise mobile strategies. Network Transformation Sometimes the pace of corporate growth outpaces technological progress, taxing the existing network infrastructure and challenging the organization to keep up with the increasing demands on the business. New technology requirements, such as video conferencing or live streaming, may put enormous stress on existing networks, which may simply be too old, disjointed, and rigid. The organization may try to respond by applying ad hoc, selective fixes and upgrades, often producing suboptimal results. The inadequacy of existing telecom networks may become the impetus for organizations to carry out significant activities to holistically evaluate their networks. These activities may start out with network performance monitoring, benchmarking and optimization. This in turn may lead to network redesign and deployment. Companies can also choose to outsource the management of parts or all of their networks to experienced IT outsourcing organizations with skilled network professionals. These initiatives can lead to the transformation of entire corporate networks with new technologies, such as Multiprotocol Label Switching (MPLS), Voice over IP (VoIP) and Unified Communications (UC), and result in network infrastructures that are better aligned with projected organizational usage rates and prepared to support strategic corporate initiatives. The work that has been completed throughout earlier phases of TEM maturity, and later through adoption of best practices, sets a solid foundation for success for these broader initiatives. At this mature stage of TEM adoption, companies will have successfully: Implemented processes for end-to-end invoice management and achieved a centralized view of their enterprise-wide inventory that is accurate and up-to-date. Set up processes for sourcing and negotiating favorable service contracts and rates. Conducted ordering and provisioning of assets in line with corporate policies to ensure services get commissioned and decommissioned effectively. Performed regular audits and efficiently managed usage and disputes to ensure continuous cost optimization of networks and services. Equipped with all the rich data about their inventory, orders, invoices, allocations, and contracts, companies can apply business analytics to their telecom networks holistically. They will be able to conduct advanced assessments, such as what-if analyses, to project the costs and benefits of conversion to a new network, a new provider or new and improved contract terms. Enterprise Mobile Strategy Management According to a recent Cisco study, the number of mobileconnected devices in circulation will reach 10 billion by 2016, surpassing the number of humans (7.3 billion). 1 Not only are mobile devices proliferating at an unprecedented rate, but their pervasiveness has changed the way consumers behave and businesses must respond to remain competitive and agile. Mobile is fundamentally changing the way business is done both as customers demand new commerce models from their vendors and employees demand more flexibility from their employers with BYOD policies. This evolution requires enterprises to rethink mobile. They need to develop mobile applications that meet customer needs, integrate well with their enterprise systems, and can be deployed and accessed easily and securely. They need to 6

7 IBM Software manage their mobile devices, including BYOD, to ensure both data governance for security and end-user support for productivity. They also need mobile solutions that can help them analyze customers mobile behavior in order to identify areas for improvement and create exceptional user experiences. Enterprises need to devise and execute on comprehensive mobile strategies to ensure that they can take advantage of advanced mobile technologies, embrace emerging mobile commerce models and drive innovation to delight their customers and remain competitive. Summary: Benefits of Best-in-Class TEM Companies with strong telecom expense management practices have greater visibility and control over the telecom lifecycle and related spend, allowing them to streamline their telecom operations and dramatically reduce costs. A Fortune 500 biotech company used IBM Emptoris Rivermine Telecom Expense Management on Cloud Managed Services to help them support their mobile telecom environment and address their evolving requirements through a period of growth and organizational change. IBM helped the company reduce their overall mobile spend by over $1.8M and achieve an overall ROI of over 200%. IBM managed and provided support for 4,000 mobile devices with a set of mobile services including self-service telecom portal, mobile optimization, auditing and 24x7 Help Desk service. IBM helped the company create and enforce their corporate mobile policies. Reduce Costs Get increasing telecom, mobile and network spending under control. Gain Visibility Gain a holistic view of the telecom lifecycle across business units, carriers and services including contracts, invoices and inventory. Optimize Networks Optimize wireline and mobile communications networks for reduced costs and improved service. Manage Mobility Proactively manage mobile devices and corporate wireless costs for optimized savings and policy compliance. The IBM Emptoris Rivermine Telecom Expense Management solution enables companies to reduce telecom expenses by actively managing the full mobile and network-related communications lifecycle. The solution streamlines and automates the entire telecom lifecycle including inventory management; procurement and order management; invoice processing, auditing and cost allocation; mobile expense and device management; and advanced business intelligence and reporting. The IBM Emptoris Rivermine Mobile Device and Expense Management solution helps companies centrally manage, track and optimize mobile spend to reduce costs and ensure the enforcement of corporate policies. 7

8 Copyright IBM Corporation 2013 IBM Corporation Route 100 Somers, NY USA March 2013 IBM, the IBM logo, ibm.com and Emptoris are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. These and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol ( or ), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the web at Copyright and trademark information at The information contained in this publication is provided for informational purposes only. While efforts were made to verify the completeness and accuracy of the information contained in this publication, it is provided AS IS without warranty of any kind, express or implied. In addition, this information is based on IBM s current product plans and strategy, which are subject to change by IBM without notice. IBM shall not be responsible for any damages arising out of the use of, or otherwise related to, this publication or any other materials. Nothing contained in this publication is intended to, nor shall have the effect of, creating any warranties or representations from IBM or its suppliers or licensors, or altering the terms and conditions of the applicable license agreement governing the use of IBM software. References in this publication to IBM products, programs, or services do not imply that they will be available in all countries in which IBM operates. Product release dates and/or capabilities referenced in this presentation may change at any time at IBM s sole discretion based on market opportunities or other factors, and are not intended to be a commitment to future product or feature availability in any way. Nothing contained in these materials is intended to, nor shall have the effect of, stating or implying that any activities undertaken by you will result in any specific sales, revenue growth, savings or other results. 1. Cisco Visual Networking Index (VNI) Global Mobile Data Traffic Forecast Update Please Recycle ZZW03240USEN-01

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