Telecom Expense Management (TEM) can be seen as the systematic attempt to manage, consolidate, and optimize the telecoms environment to curtail risk and lower costs. Auditing is a linchpin in this process and, if performed well, can unlock huge savings.
Even with a trusted TEM partner shouldering most of the labor, such an audit can feel daunting. But what really goes into one?
The TEM Audit Process
A TEM audit service comprises four areas: invoice conversion, inspection, dispute management, and review.
Conversion
Most TEM providers will firstly work with the client’s carriers to convert their invoices into an industry-specific, electronic standard, such as EDI ANSI 811. Analysts within the TEM provider can then use software to audit each charge item on every invoice, as described below.
Inspection
Inspection activities can be split into two areas: high and low level.
1. High-Level
Upon receipt of invoices, a TEM provider conducts high-level validation in order to approve them for payment. This includes:
- Verifying the accounts belong to the customer.
- Pairing billing with inventory records.
- Confirming cost allocations are complete and accurate.
- Ensuring charges or variances fall within pre-determined tolerance levels.
- Assessing contract-compliance to confirm that all discounts and rates, as stipulated in the terms, have been fulfilled. Contracts are stored within the TEM software, and the terms and conditions are evaluated against rule-based logic to evaluate compliance.
2. Low-Level
Some of the more detailed work an analyst performs is:
- Analysing avoidable features such
as: call waiting, call forwarding, speed/repeat dialing, caller ID, verify busy, three-way calling, wire maintenance, calltracing , and call return. - Reporting and blocking premium-rate calls.
- Investigating usage spikes.
- Examining charges for unauthorized internet activity,
voicemail from third party companies’ monthly directory assistance plans, calling plans with no usage, etc. - Checking that all lines have the correct PIC/LPIC (Primary/Local Interexchange Carrier) codes.
- Adding notes for any spikes in charges or questionable issues.
Dispute Management
Through a sound understanding of carrier procedures and dispute channels, a TEM provider is ideally placed to resolve discrepancies identified during invoice inspection. This includes billing errors, cost reduction opportunities, credits, and refunds.
When an error is identified, the analyst immediately reviews it, and, if needed, creates a dispute-entry, which in turn sends a notification to the carrier. In this way, the error is tracked and the analyst can maintain a handle on it to get it resolved.
Review
The results are in. What next?
Well, comprehensive summaries of audit savings can be viewed by the client within the TEM tool at any time. Furthermore, the designated account manager regularly checks in with the client to review TEM cost reductions.
Best Practices
For optimal TEM audits, both provider and client should consider three things:
- Frequency
- Reach
- Ownership
Let’s take a look.
1. Frequency: Ongoing Rather than Intermittent
One form of TEM auditing is sometimes known as “box auditing”. This is where an auditor sets up shop within a business for a length of time, leaves with a box of files and performs a historical audit.
The problem with this intermittent approach is that systemic problems are not dealt with, nor the reasons that the errors occurred in the first place. Box auditors are embedded within a company for a limited time, not continuously, so only gain a partial understanding of your unified communications. Therefore, they will likely miss some errors.
So, TEM audits should be part of a continuous process that takes place as invoices are acquired.
2. Reach
When it comes to the scope of the TEM audit, two areas should be taken into account:
(i) Data-Rich, not Data-Poor
It’s vital that feature-level detail is captured, as this where a large proportion of errors can be found. The greatest savings are often extracted by identifying small but recurrent overcharges. The conversion to EDI ANSI 811 enables granular auditing: every possible line-item charge is inspected rather than sample data.
(ii) Management of the Whole Lifecycle
Some firms will take care of the entire TEM lifecycle process, which begins with the procurement of devices and services. This means the vendor can then build and maintain a telecom inventory and auditing is performed against a precise picture of the company’s assets.
3. Ownership: Professionally Managed, not Under Managed
By engaging with a TEM vendor, a company benefits from their substantial expertise in:
- Reviewing contracts, billing records, inventories, and tariffs.
- Managing disputes with carriers.
- Advising over and presenting cost-savings.
As mentioned earlier, the business also reaps the rewards of establishing continuous, repeatable processes that manage the full lifecycle of telecom environments. Telecom expenses reach far and wide within a business so it's only by working with a long-term partner that a company can really get a handle on them.
One-time audits may return one-time savings, but they don't fix the underlying broken processes that led to the need for the audit in the first place.
Time and time again, it's been shown that huge potential savings are on offer with an effective TEM program.
For example, one study broke down savings into various categories. It revealed that in the "audit and recover for billing overcharges" category alone, a 15% reduction in expenses can be achieved. Similarly, in the inventory management category, expenses can be cut by 15%.
However, when considering telecom expense reduction, many enterprises only really look at cutting staff. And with an already thin telecoms department, they may assume nothing more can be done.
Underestimating potential TEM savings is one of 8 the mistakes discussed in our comprehensive guide. If you'd like to learn more, why not download today for free?
Topics: TEM
