How to Balance Software and Services in Your TEM Plan

Telecom Expense Management (TEM) is a vital role in modern business. You have to communicate, and that communication costs money. Without sufficient expertise, you can’t hope to optimize communication costs, and the necessity of modern communication creates a money pit that hurts the business.

That’s why TEM providers are on the rise, and it’s why they offer a large range of packages that can get your spending under control. Picking the right package, though, can be a little tricky. Today, we’re going to explore the means to balance software and service spending in your TEM plan.

The Software Only Approach

It is entirely possible to purchase TEM software and let it do the heavy lifting for your expense management. In fact, the best TEM service providers in the world lean heavily on their software. It all makes sense. So, to consider the software balance of your TEM spending, let’s consider a case where you only invest in software.

Typically, TEM software packages will include deployment and some minimal training. You aren’t just handed an installation DVD and a pat on the back. So, for any business, a software-only TEM investment would still include a little bit of service.

The bigger picture is that maintaining the software and using it effectively falls entirely on your own shoulders. That’s why a software-only approach seems optimal in one of two circumstances. The first is a small business that really doesn’t need persistent IT support. TEM software can still help optimize telecom spending, but a minimalist approach is the only way to be cost-effective.

The other possibility is that you run a company with self-sufficient, in-house IT. Your IT department would like some shiny new software to improve expense management, but they can handle distributing and managing that software. Both of these cases are viable, and they both happen in practice.

The Fully Outsourced TEM Package

On the other end of the spectrum, some businesses opt for fully outsourcing TEM. In this case, a firm handles everything from software management to reporting on expenses, upgrading systems and everything else that goes into telecom. It’s like using fully outsourced IT or cloud services for traditional IT needs. In that same concept, the outsourced option is optimal for businesses that need powerful TEM resources but don’t have the IT infrastructure to run it themselves. In many cases, businesses that outsource will have in-house IT; they just won’t want to invest in expanding those IT resources to cover TEM.

As you can expect, fully outsourcing TEM is a larger out-of-pocket cost, so it’s best for companies that will net a sufficient ROI to justify that decision. Make no mistake. That ROI exists for a lot of businesses.

Hybridizing the Two

The final option is to combine services packages with software packages. The details vary, but you wind up somewhere in between running everything yourself and having a TEM provider to help with managing your systems. It’s important to understand that this is not a situation where the best of both worlds is always the superior choice. It really can be more cost-effective to do only software or entirely outsource.

A hybridized TEM package is ideal for companies with IT infrastructure that might be worried about overextending their IT resources. You keep the service option as a safety net to fill in gaps and keep expense management on track, even while your in-house IT is busy with new operating system updates.

When you consider the three options for TEM, making the right choice is actually simple. You simply compare the costs to your expected ROI. The entire balancing act is ensuring that you have sufficient resources to save money with your TEM investments. As long as you hit that goal, you’re in the black. And, to state the obvious, your best bet is to invest in a package that can be altered or updated down the line. If you don’t strike the perfect balance of software and services from day one, you can simply adjust your package until the numbers are satisfactory.

Gartner estimates most organizations save 10 – 15%

With costs as low as 1% – the instant ROI is a no-brainer

Are you ready to take your telecom expense management strategy to the next level?

ABOUT THE AUTHOR: NANCY PECKHAM

Nancy began her career in telecommunications in 1983 as an account executive with Republic Telecom, a regional long distance carrier. She was named district sales manager for the Wisconsin region in 1987 when Republic Telecom was acquired by Mid American Communications. She recognized a need for independent, objective telecommunications consulting which led her founding Valicom. Since its launch in 1991, Valicom has been a leader in providing telecom expense management solutions and serves enterprise and mid-market clients in a variety of industries and verticals across the U.S. Nancy earned a bachelor’s degree in psychology from the University of Wisconsin-Madison, founded and served as president of the Telecommunications Professionals of Wisconsin (TPW) from 1989-1992, and was executive vice president on the board of directors of the Society of Telecommunications Consultants (STC). Nancy is also a founding member and executive council chair of the Independent Telecommunications Expense Management Association (i-TEM).