Untangling Wireless Expenses
By Al Subbloie
the United States there are more than 175 million cell
phone subscribers, over a third of whom are business users.
Though a vital part of daily business operations, more and more
corporations find they lack the control over their wireless costs that
they enjoy in other telecom areas.
Unlike traditional corporate IT or wired telecom services,
wireless communication was not generally initiated or engineered by
the corporation; it crept in the backdoor, so to speak, through
employees—early adopters looking to enhance traditional methods of
speed with which cell phones and other devices were absorbed into the
day-to-day operations of the enterprise was impressive: in 2001 U.S. corporations spent $37 million on
wireless communication; by 2009, according to Cahners, business
spending on wireless data will reach $11 billion. Naturally, as
wireless usage continues to grow, management of those assets became
very few companies actually know exactly how much they spend on
wireless hardware and services each year. Take cell phones for
instance: for years cell phones were considered the personal property
of the employee and the corporation had nothing to do with choosing a
phone, deciding on a plan, or paying the invoice. But as more workers
began using these “personal” devices for business purposes, the
corporation began to absorb more of the cost—usually via the expense
report—an expedient (if terribly inefficient) method. In fact, one
analyst (Meta) estimates that 30-40 percent of companies allow
employees to expense their own cell phones and select appropriate
plans. They know they’ll foot at least part of the bill eventually,
but they’ve chosen to let their employee make the decisions.
some 12,000 wireless carrier plans available—plans that evolve
constantly with changes and new offerings—employee wireless
contracts vary according to carrier, plan, cost per minute, roaming
charges, monthly usage, overage charges, etc.
As a method of managing spend, the expense report is woefully
inadequate—providing the least management control and the maximum
usage costs; it fails to provide visibility into the company’s
wireless usage and spend, offers few consistent budgeting
capabilities, restricts corporate buying power, and limits inventory
awareness. So its no wonder that so many corporations lack the control
over wireless costs that they enjoy over traditional communications.
They have little or no say over which carriers or plans their
employees are choosing, have no real knowledge of their inventory, and
no way to effectively audit what exists.
a larger degree, organizations that are failing to manage their
wireless costs are missing a large opportunity for savings.
While analysts differ about the percentage of savings to be
realized by implementing tighter management controls (the number
ranges between 15-30 percent), what they do agree upon is that
organizations need coordinated service procurement and management, as
well as consistent documented policies, in order to minimize wireless
costs and measure a return on investment.
The solution to the problem of unchecked wireless spend is to
integrate wireless into the organization’s overall enterprise
communication strategy. Wireless
services do, after all, share common processes with traditional voice
and data services, including contract and bill management, cost
allocation, procurement, inventory management, analysis, and
reporting. In the long run, failure to establish a unified voice,
data, and wireless process will result in a deficient solution that
will always be operating at less than optimum.
addition, there are profound benefits to be had in integrating
wireless into an overall telecom expense management plan:
Improved bill auditing
and error detection capabilities
Increased accuracy of
enterprise telecom expense allocations
Improved visibility and
understanding of enterprise telecom costs
enterprise-wide service inventory
Optimized carrier service
One of the primary
benefits to organizations that integrate wireless through effective
use of resources, technology, and expertise is, of course, significant
savings. But taking into
consideration the intricacies of the technology, the volume of plans,
a constantly evolving wireless infrastructure—issues that often
affect global organizations on a country by country basis—the
ability for an organization to single-handedly achieve a position of
wireless self-sufficiency is, at best, limited. The sustained ability
to manage wireless, voice, and data expenses is best achieved through
a specialized provider of comprehensive, automated Telecom Expense
Management (TEM) systems and services.
What Should You Do?:
If wireless telecommunications costs are “running wild” in your
organization and there is no system in place by which to manage costs,
than something must be done. But doing something, and doing the right
thing, often have entirely different outcomes with remarkably
ensure that wireless expense management activities are appropriately
focused, organizations should take control of costs by adopting a
wireless policy for usage and management,
followed by negotiation for corporate-wide service contracts.
Gartner Group estimates that enterprises can save 15-35 percent
on their wireless costs by instituting consistent and documented
policies, coordinated service adoption, and stringent management of
order to achieve this goal, corporations should enlist the aid of a
knowledgeable TEM vendor that can address the multiple fundamental
concepts that comprise telecom expense management.
Although basic in nature, these concepts serve as guideposts
for the organization and help ensure maximum bottom-line benefits to
wireless operations should include administration and management
areas, as well as procurement, billing, allocations, auditing, and
negotiations. Consolidation will lead to simplified management, the
standardization of adoption and usage policies, and will provide
increased control and improved cost structure through the elimination
or reduction of operational redundancies.
- It’s an arduous task, but in order to achieve a
collective view of usage, organizations must gather information about
their disparate wireless activities. An aggregated view of the
wireless spend will aid in a significant realignment of corporate
buying power; without this “holistic” view organizations cannot
purchase/contract in bulk, bundle services, or negotiate the best
should deploy automation tools with functionality tightly integrated
between wireless processes. For instance, creating an inventory of
enterprise-wide equipment and services may yield positive benefits in
the contract negotiation phase. But without the ability to link
inventory to contracts, billing, auditing, procurement, reporting, and
allocations, inventories that were once accurate—and the resultant
benefits—become outdated. The process areas requiring tight
integration include, but are not limited to:
– Automated contract management lets companies manage all
aspects of their carrier/vendor agreements by capturing all
applicable details including service and product descriptions,
rates, discounts, commitment levels, contract terms, etc. A
consolidated view of contracts allows organizations to achieve
optimal terms, rates, and conditions by examining agreements,
eliminating overlaps, and conducting timely, well-informed
agreement negotiations. Automated contract management capabilities
also serve as a foundation for automated rate tests, usage
threshold comparisons, inventory discoveries, and more.
Inventory – Manually creating and maintaining an accurate
wireless equipment and services inventory would be pointless given
the average number of services and inventory items to manage
within an organization, not to mention the frequent changes
resulting from employee hirings, dismissals, transfers, and moves.
Automated inventory capabilities that enable an accurate and
up-to-date inventory, give organizations the ability to capture,
analyze, and allocate monthly spend and utilization activity at
the line item and employee level.
– Provisioning enables
requests and orders for services and equipment to be handled on an
enterprise-wide level. With a centralized provisioning ability,
companies can centrally manage moves, adds, changes, and
disconnects for a wide array of products and services. Automated
provisioning is a vital component in establishing a closed loop
“procure to pay’ process and should not be overlooked when
considering a comprehensive, automated solution.
– Automated billing should include of all aspects of invoice
processing, including the receipt, loading, audit, allocation,
approval, payment, and tracking of carrier billing.
Billing automation simplifies the processing of invoices by
providing a standard, consolidated view of all telecommunications
expenditures (not just wireless). With the ability to handle
automated billing feeds, an automated telecommunications expense
management system can eliminate paper bills, and reduce turnaround
cycles and late fees.
– With accurate inventory and contract data, organizations can
regularly and frequently audit contact rate and terms, billing,
service inventory accuracy, employee spend, market factors, trend
and spend variances, utilization, and configuration services.
Through automated auditing, enterprises can quickly identify
discrepancies and errors, allowing telecommunications staff to
focus on best revenue generating/expense management practices
rather than on administrative data manipulation and comparison.
and Analysis –
By using a consolidated data structure, an automated TEM
process will provide the ability to “slice and dice”
information across multiple functional areas. With standard
reports writing and analysis capabilities users can develop
customized reports on everything from usage and allocation to
billing and inventory – all of which enables greater
understanding for improved manageability. In addition, “what
If” analyses functionality helps organizations identify and
target opportunities for reducing and controlling costs.
must be able to interpret what is going on within their organization
in order to make reactive and, more importantly, proactive changes.
With automation, comes the ability to optimize infrastructure and
implement the process, policy, and staff-related changes necessary to
leverage wireless investments and resources in a strategic manner.
the organization doesn’t recognize the processes of change and
adaptation as critical components of managing wireless expenses, it
will ultimately subject itself to unnecessary frustration and less
than optimal benefits and savings.
Centralization allows companies to report and manage their
operations with a higher degree of understanding and responsiveness.
Therefore, organizations should carefully consider the ability of
their automated solutions and processes to adapt to the growing needs
of their organization and their market.
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