IBM Global Technology Services August 2007 IBM Telecom Expense Management Services

Transcription

1 IBM Telecom Expense Management Services Gain control over your telecommunications environment by proactively managing your voice, data and wireless expenses.

2 Let telecom expense visibility, control, intelligence and automation transform your organization Leaders of companies of all sizes have one thing in common: You are all trying to control the cost of telecommunications. In the past few years, telecom costs have ballooned to be one of the top five expenses companies have to contend with. In addition to traditional voice and data circuits, organization must now manage a plethora of wireless devices and contracts. This can be a daunting task for even the most streamlined of corporations. Consider this: The average Fortune 500 company spends more than $100 million on telecommunications services each year. Yet, on average, 7 to 12 percent of telecom expenses are in error. Simple math shows that if 10 percent of your spend is in error, you re literally throwing away $10 million each year! Think about all the revenue-generating opportunities that could be funded with that money. Communications tools, such as wireless and wired connections, are fundamental in establishing solid relationships with your customers, suppliers and business partners. Yet, you re often forced to delay new communications projects that would give you a competitive advantage, such as Voice over IP, because it s difficult to accurately forecast labor and infrastructure costs. Implementing a proactive Telecom Expense Management program can help defray those costs. With the TEM managed service from IBM, you can go beyond cost savings and implement innovative business process improvements. The insight you ll gain into your telecom spend will help you manage the explosive growth of wireless devices in your organization and create efficient chargeback and department allocation procedures. You ll also be able to use this newfound visibility to optimize network price/ performance, plan your network strategy, forecast spend and justify telecom expense decisions to your management team. Telecom can be expensive in terms of the manual labor required to audit invoices and approve payments. Almost half of the invoices that companies deal with today are still in paper format, requiring significant resource hours to verify and allocate expenses. By automating the ordering, billing, invoice validation and cost allocation of voice, data and wireless services, you may be able to reduce staff or redeploy them to more pressing projects. IBM Telecom Expense Management Services gives you the power to quickly adapt to the changing world of telecommunications and drop telecom spending out of your top five expenses. 2

3 Today s Challenges IBM Telecom Expense Management Services (TEM) As companies expand and change, so do your telecom needs. The move to distributed workforces, mobile workforces and telecommuting puts a strain on IT departments trying to maintain an accurate inventory of voice, data, and wireless assets, as well as the control of telecom spending. Mergers and acquisitions also pose challenges as companies look to bring together multiple networks while tearing down and building up telecommunications infrastructures at a manic pace. Three of the biggest obstacles that companies face in reducing telecom costs include a) the fact that so many of the invoices they receive are paper format, b) provisioning and billing are decentralized and c) their TEM environment is decentralized and reactive versus centralized, controlled and proactive. These three factors result in numerous challenges, including the inability to have accurate reporting, chargeback and dashboard information; to maintain a current inventory of wireless devices and services, data and voice network circuits; and to put in place invoice-processing efficiencies. The average Fortune 500 enterprise receives more than 15,000 telecom invoices annually and many of those are still in paper rather than electronic format. An inordinate amount of these bills can be more than 100 pages in length and contain myriad features and fees. In most cases, enterprises are invoiced separately for each location and, in some instances, for each employee. For many companies, it is standard procedure for employees to submit their home broadband or wireless bills for reimbursement. To stay on top of these bills, data is often entered into spreadsheets and then audited manually. This is an enormous expense in terms of personnel. Companies that are short-staffed are forced to rubber-stamp invoices, which can lead to payments for erroneous circuits, services, and fees. In an era of fiscal accountability, this inability to validate charges can be damaging to overall compliance. Billing issues cause enormous headaches for companies that strive for an accurate inventory assessment. Inventories are critical for organizational build-outs, right-sizing and other changes that affect the infrastructure. Without a clear view of the resources that are in use, available or expired, companies cannot reap the full benefit of strategic decisions. For instance, one organization said poor record keeping led them to pay for services at a remote location long after it had been shuttered. 3

4 Decentralized billing can also pose a security risk for companies. Often, telecom teams continue to pay for broadband or wireless services for employees that have left the company or have been terminated because they had no notification of the change. Open accounts leave organizations vulnerable to hacking, theft of intellectual property, and other malicious behavior. Decentralization brings other problems. Individuals negotiating contracts are far less efficient than a corporation that can leverage volume purchasing. Individual pricing of telecom expenditures can be 20% higher, or more, than when using a corporate rate. Companies with decentralized purchasing have little control over who places orders and where they place them, which can result in employees engaging in out of process spending. Contracts go unmonitored, and companies can incur late fees and afterexpiration pricing. A big area that has befuddled companies is wireless. Organizations have seen an enormous spike in the usage of cell phones and handhelds, but have been caught off-guard in terms of managing this growth. Many are allowing employees to submit individual expense reports for their cell phone usage. This results in an unnecessary mound of paperwork as well as a missed opportunity for volume pricing on service contracts. In addition, this decentralization makes it difficult for staff to figure out how to chargeback expenses to specific departments. Without consolidation, companies cannot predict the costs of new telecom projects. Virtual private networking, MPLS, and Voice over IP can be beneficial for many organizations, but they can also be tricky in terms of finding the appropriate ROI. Companies need to be able to apply business intelligence to their telecom spending and inventory before they can determine the best time to convert to newer technologies. Managing in a reactive procedural TEM environment often results in repeating functions and tasks each month without linkage to the previous month's activities. This can increase staff costs to reproduce the life cycle of the TEM data and functions. Billing errors may often be captured with little to no backup to formally dispute the charges with telcos. Without backup data, the billing errors are placed in a queue with no incentive for the telco to resolve them on a timely basis. The additional costs in staff resources in manual analysis and credit resolution are difficult to track. 4

5 IBM Telecom Expense Management Services: A One-Stop Shop While these problems may seem insurmountable, IBM Telecom Expense Management Services let you tackle them with ease. By automating all aspects of the telecom lifecycle, including ordering and billing, you get a clear and accurate view of your telecom inventory and spending. With this information, you can immediately reduce your telecom expenses and begin to plan for new initiatives that will help you gain a competitive advantage. Order Inventory management management Telco bill payment management Cost recovery management Process and tools integration, automation and strategic information Process and tools integration, automation and strategic information Vendor management and operations The first step of the TEM lifecycle management service is the ability to track order workflow and receive notification on progress. At all times, you ll know the status of telecom contracts and installations. You ll be able to see what contracts need to be renewed. You ll avoid late fees and the high costs associated with out-of-date service contracts. And you ll be able to communicate to other parts of your organization the status of mission-critical infrastructure build-outs. A key part of reducing your telecom expenses is to centralize ordering and provisioning of all services. With IBM s service, you set policies that manage user telecom spending by limiting choices to vendors and services you ve preselected. You gain significant savings by engaging in volume purchasing and narrowing the field of carriers and service providers with whom you do business. At the heart of the TEM service is an inventory database that is automatically updated with the latest users, locations, services, cell phones, wireless services, circuits, and more. You can quickly see if the resources you need are available within the enterprise. For instance, if you have an employee starting in a remote office, you can use the database to see that another employee recently left and his landline, mobile device and contracts are ready to be re-provisioned. As mentioned previously, the IBM service is not only useful to understand your current telecom spend, but also to project your future needs. The service lets you monitor, analyze, plan and optimize your total telecom network. With this insight, you can place more accurate orders for new infrastructure. You can also run numbers to cost-justify technology such as Voice over IP and virtual private networking. 5

6 The IBM service can validate all bills against your contracts. They ll be checked automatically for accuracy in rates and taxes. The system also looks for any adds, moves or changes so you can reallocate or terminate unused resources. By automating the telecom lifecycle of your voice, data, calling cards and wireless contracts into a single inventory and moving from paper invoices to electronic billing from all the suppliers who offer it, you will save on resource hours otherwise needed to collect invoices and manually enter data. The next step in managing the lifecycle of your telecom assets is to validate what you are paying for against what is in use. Too often, companies that don t have a view of their inventory pay for duplicate or discontinued circuits. With IBM Telecom Expense Management Services, you can easily see what resources are required and which are ready to be decommissioned. Processing and auditing are also automated as part of IBM s TEM service. You no longer need a team of people to root through invoices and spot-check them. Instead, it is estimated that 50% of personnel that were handling invoice processing and auditing can be reassigned to other business-critical projects. Regular auditing also allows stockholders and regulators to feel safe that you are in compliance with their rules. Another important element of the telecom lifecycle is to match resources to departments and projects so that expenses can be accurately tracked. You can assign categories to your expenses and then chargeback or allocate costs throughout the organization. You ll quickly learn whether resources are being used appropriately. A significant difference between manual and automated TEM lifecycle management is the visibility you have into your network. Standard reports from IBM let you monitor key performance indicators and alert you to potential problems. IBM Telecom Expense Management Services lets you do all of this with incredible ease: Automate ordering and billing Use reports to help you optimize network price/performance Reduce and/or reallocate staff Create a cost center that enables internal chargebacks Build and manage an accurate voice, data and wireless inventory Have data to help you better negotiate with carriers and other service providers Audit your processes and invoices Plan for future revenue-generating telecom spend 6

7 Savings Abound IBM Telecom Expense Management Services (TEM) Savings Abound As you begin to roll out IBM Telecom Expense Management Services, you ll see eight areas of savings that enable you to reduce telecom costs by more than 10% in the first year alone. Contracts, billing errors, fraud, missed disconnects, unnecessary services and features, inventory cleanup, and optimized services, plans, and accounts are all areas where companies waste valuable time and money. With IBM Telecom Expense Management Services, you can easily identify and decrease these costs. In addition, significant labor savings can be realized as a result of TEM process automation. Labor For many companies, staffing is at a premium. Yet manual telecom expense management processes absorb valuable human resources. By implementing an automated solution and turning over their TEM processes to IBM, companies can realize a reduction in the staff needed. Automation allows for fewer personnel to handle order management, invoice processing and auditing, and allocation. Contracts Negotiating and enforcing contracts can be time-consuming if done manually. Oftentimes, companies don t have the staff to follow up on contract violations, leaving these documents toothless. Automation solves this problem by matching contract language to invoices. Some examples of savings include: - Corporate discounts for achieving pre-negotiated minimum annual revenue commitment targets - Credits for incorrect overage amounts - Refunds for rate plans being incorrectly applied - Waivers for late fees, and credits for service quality and SLA issues BOTTOM LINE: By automatically finding and resolving contract issues, companies can save an average of 2.77%. On an annual telecom spend of $100 million; this represents a potential savings of $2.77 million. 7

8 Switch ON your IBM TEM Services Billing Errors Billing errors are some of the most difficult charges to determine. The time it takes to manually match service charges against actualities, such as employees that have left or locations that have been closed, can be overwhelming. Automation ensures that changes in the enterprise are reflected in accurate billing. For instance, the IBM service can ensure that companies are not billed for: Locations that do not belong to the company Closed accounts Transferred toll-free numbers Inappropriate long-distance charges The TEM service also helps companies collect on all overbilled charges and other errors. Fraud Fraud is another area that is difficult for personnel to detect. By matching user policies to invoices, the automated service can quickly identify unauthorized calls as well as deny unauthorized international calling reimbursements for employees. Missed Disconnects Mergers and acquisitions as well as right-sizing pose problems for manual TEM processes. With automated tools, companies can immediately see if they are being mischarged for locations and employees that are no longer part of the company. By using TEM services from IBM, you ll be alerted to: Charges for services at closed sites Charges from former cell phone providers Internet access that was not canceled with the line Former employee cell phone services Billing: Identifying and collecting on billing errors can lead to 1.30% savings. With an annual telecom spend of $100 million, that s $1.3 million more potential savings. Fraud: Fraudulent charges make up an average of.10% of a telecom bill. Therefore, on an annual telecom spend of $100 million; $100,000 can be saved by eliminating them. Missed Disconnects: Missed disconnects account for an average of.35% of all telecom charges. On an annual spend of $100 million; $350,000 can be saved by identifying and resolving these issues. 8

9 Unnecessary Services or Features When users or remote sites are left to order their own service plans, they can overspend on unnecessary services or features. IBM Telecom Expense Management Services allows companies to set policies surrounding what features and services are imperative. By canceling or getting refunds for these services, companies can save a tremendous amount of money. Some examples of savings come from: Canceling or removing directory assistance Hosting fees Conference calling Unused WATS lines Two-way messaging Unauthorized insurance Secondary numbers Inventory Cleanup Spreadsheets do not offer you the visibility you need into how resources are being used. Automated solutions map in-use items to invoices, allowing unused circuits and services to be cancelled and removed. For instance, IBM s service enables you to identify and cancel unidentified lines. You can also gain back-billing for services that are not being used, home lines that have been moved to personal liability, etc. Optimizing Services, Plans and Accounts Trying to optimize your network manually takes a significant amount of resource hours to pour over spreadsheets in trying to spot trends. IBM s TEM service analyzes enterprise-wide usage and identifies areas for savings. For instance, the reports can help you to identify when to: Cancel low toll-free usage Put cell phones on fewer minute plans Cancel unnecessary long-distance devices Move items to other accounts to avoid minimum usage fees Close out unidentified thrifty accounts 9 Unnecessary Services or Features: Unnecessary services or features can represent 2.45% of telecom charges. On an annual spend of $100 million; you can save $2.45 million by canceling or removing them. Inventory Cleanup: Leaving lines connected that are unused is an incredible waste of money. In fact, by cleaning up your inventory, you can potentially save 2.57%. On an annual spend of $100 million, which would put $2.57 million back into the budget. Optimizing Services, Plans and Accounts: Using automation to optimize your network and identify inefficiencies can save an average of 1.2%. On an annual spend of $100 million, this can mean $1.2 million. When you switch on your IBM TEM services, you ll start to see significant savings and process improvements. Within the first year alone, you have the potential to save more than 10% of your telecom spending!

10 Conclusion IBM Telecom Expense Management Services is a powerful end-to-end solution that lets you see immediate savings across the enterprise. You ll gain the visibility and control needed to optimize the price/performance of your voice, data and wireless infrastructure. And you ll be able to reduce staff and increase accuracy as you automate invoice processing and auditing. Most importantly, you ll be able to reap the rewards of new and exciting technology through business-intelligent analytics. With IBM s TEM service, you won t just enjoy a reduction in annual telecom costs; you ll be able to thrust your company ahead of the competition. IBM Corporation New Orchard Road Armonk, NY IBM United States For more information about IBM Global Services, contact your IBM sales representative. 10