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TEM: Bringing Together IT and Finance

By MAE KOWALKE TMCnet Associate Editor for Channels

At its core, telecom expense management (TEM) is about saving money. But TEM has broader implications, too. The business-changing aspects of TEM can be presented differently depending on the enterprise department examining cost trends. Two enterprise departments that are becoming more integrated as a result of TEM are finance and IT.

More specifically, TEM is bridging the gap between finance and IT, enabling enterprises to become more efficient. The business process outsourcing aspects of TEM probably are of most interest to finance, while IT's latest role as a communications technology clearinghouse makes this department interested in TEM's technology management components.

However, both these functions of TEM are of interest to the entire organization, so they cannot be contained to a single department. The power of TEM lies in its ability to streamline management of the entire company's communications and IT assets. TEM is not just about phone bills anymore.

Recent research from Aberdeen Group indicated that TEM can serve as a tool to bridge the gap between finance and IT, so the enterprise can achieve 'total telecom cost management' and efficiently manage communications spend. TEM gives IT the automation and tools needed to manage spend. TEM also gives finance much-needed visibility into that spend.

The Aberdeen TEM research found that, on average, large enterprises spend about 1 percent of revenue on telecom network expenses. For small companies, the need for TEM is even greater; these businesses shell out an average of 2.2 percent of revenue for communications. Companies of all sizes need TEM to effectively control communications costs, correct billing errors, and even keep vital equipment running smoothly.

TEM helps IT and finance achieve cross-departmental telecom spend management. How? TEM achieves this by maximizing visibility and boosting operational efficiency. The result: a positive effect on the bottom line. As telecom services become even more complex and eat up more of the IT budget, the need for TEM will grow proportionately. TEM helps IT and finance achieve greater value by aligning their management goals. TEM covers high-impact operational and automated functions. These TEM functions include usage management, invoice management, auditing, service order management and provisioning. The need for TEM to streamline such processes is magnified for large enterprises with many locations that manage multiple vendor relationships.

While more than half of companies have some program in place to reduce telecom costs, there's just not substitute for TEM. Achieving desired results requires TEM, because TEM includes the technology and other tools needed to achieve operational efficiency. Managing operational costs, network expenses, late payment penalties, procurement and auditing is a spectrum of tasks best left to a robust TEM solution.

Download a free copy of the recent Aberdeen research report on the CFO's view of TEM.

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Mae Kowalke previously wrote for Cleveland Magazine in Ohio and The Burlington Free Press in Vermont. To see more of her articles, please visit Mae Kowalke's columnist page.