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Frost&Sullivan TEM WebCast

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Frost&Sullivan and TeleManagement Technologies, Inc. (TTI) discuss Telecom Expense Management (TEM) and its importance to IT organizations.

Frost&Sullivan and TeleManagement Technologies, Inc. (TTI) discuss Telecom Expense Management (TEM) and its importance to IT organizations.

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  • Telecommunications services are obviously not limited to wireline telephone (CLICK) Wireless, Internet, Voice over IP etc, etc, etc Not only are there an large array of services, but there are also an amazing, always changing set of service providers Competition is a good thing: Prices move lower over time For Example, look at how inexpensive long distance services are today and compare that with how it used to be. While prices have fallen for individual services, a company’s aggregate communications costs have risen. More and more services are now “essential”, so organizations are finding that while long distance is less expensive, the collective costs for all other services translate into an ever increasing level of spending. Examples include broadband access, wireless services, data transport and storage services, video conferencing services, and application services to name a few.
  • Telecom (and telecom expenses) are essential for all business Up to 4% of annual revenues spent on telecom-related expenses BUT: A large organization, not actively managing those expenses, overspends by 5- 30%, with most estimates in the 10-20% range All those choices in services and providers lead to hundreds or thousands of invoices to deal with Because of the complexity of these many invoices: Many are subject to late fees (with some estimates as high as 65%!!!), adding to the wasted money Many people are needed to process those invoices, let alone be sure they are right Overall, thousands to millions of dollars are being wasted, as well as employee time that could be adding value to the company STOP throwing money (and time) away
  • Most organizations spend up to 4% of annual revenues on telecom And most that don’t actively manage, overspend by 10-20% So, for a company with $50M in annual spending, if they are overspending by 15% CLICK That is a lot of money Time is another key factor in this equation If a company is processing 1,500 invoices a month and it takes just 15 minutes per invoice CLICK 2 ¼ people are required, just to process! That doesn’t count the potential Aren’t there better, more productive uses that these people could be put to? Clearly there is a need for more effectively managing the communication expenses within all organizations, but especially for those with millions at stake. Managing telecommunications expenses is not just a good idea, it is essential for organizations of all shapes and sizes due to the amount of potential savings that can be realized.
  • What Is Telecommunications Expense Management (TEM)? TEM is a high-level methodology incorporating technologies, processes, policies and people. There is no single way an organization can deploy its telecom resources and there is no single answer on how to manage these resources. TEM starts with asking questions about how telecom resources are currently utilized and how they are paid for. Next, improvements to the current operating environment are identified and implemented. Finally, TEM requires continual monitoring to make sure that changes, which may take place later on, are properly accounted for. TEM can be broken down into four major areas of administration: CLICK Financial Contractual Inventory and Provisioning Business Intelligence
  • Financial Financials are a key component of any TEM initiative and are the main business driver for implementing a TEM strategy. Financial questions to address include the following: CLICK How and when are invoices received? In what format? How are these entered into internal systems? How long does it take to process an invoice and how many people does it take? What are the due dates? Are you subject to and/or paying late fees? CLICK Have you had data entry mistakes due to re-keying information into various systems? How do you allocate costs across the organization What is the approval process? How long does approval usually take? How does information get to the approvers? CLICK How and through what systems do payments actually occur? How are expenses tracked? Is this information used for future budget planning? Can you flag expenses that vary from budget? Is there a way to automatically indentify billing errors? Is there a way to correct those errors?
  • Contractual Every business contracts for the telecom service it receives, whether the contract is “standard” or is one containing specific and uniquely defined requirements. Larger organizations “buy in bulk” and can often negotiate lower prices or guaranteed levels of service. Establishing the “best” contract for a given set of business conditions requires knowledge about the services needed, available requirements, and definition points around which a service provider will commit. Contractual questions to address include the following: CLICK What are the current contracts? Do they cover: Service Availability? Service Acceptability? Repair Response Time? Are current contractual obligations being met, both by your company and the service providers? Are penalty and/or bonus provisions in place AND being enforced? CLICK Are the best possible contracts in place that balance price, Quality of Service and utilization? How are contractual variances identified and dealt with? Is contractual information tied together with financial information?
  • Inventory and Provisioning Managing communication service expenses requires understanding of the current inventory of deployed resources and services. Inventory is constantly changing as new resources/services are provisioned and changes to existing resources/services are implemented. TEM includes optimizing utilization of inventory. Key inventory and provisioning questions to address include the following: CLICK What telecom resources and services are currently under contract(s)? Are these being fully utilized? Are there resources and/or services that are under-utilized? Not Utilized at all? When a new resource or service is provisioned, how is it tracked? When an existing resource or service is discontinued, is there verification that it is truly out of service and not being billed for? CLICK Are you companies internal resources designed optimally for utilization, Quality of service and cost? Do you have an inventory system in place? When a service or resource is provisioned or de-provisioned, is the inventory system notified? CLICK Is the inventory information tied to financial information? Contractual information?
  • Business Intelligence A large number of monthly telecom invoices means large amounts of raw data. This data, particularly if tied with other information from internal systems, delivers an organization a wealth of information if it is easily accessible and searchable. Important TEM-related business intelligence questions to address include the following: CLICK Can you mine and use the all the data generated by telecom invoices? If the data is accessible, what is the lag time to access the information? CLICEK Can you telecom expenses be categorized? By service or equipment type? By Service provider? By vendor? By Corporate hierarchy? In other ways? CLICK Can this data be tied to other data from within the organization? Can trends in the data be identified? Can exceptions in the data be noted? Can current usage trends be used for forecasting?
  • Telecommunications services play a key and growing role in every business, regardless of size While individual services continue to decrease in cost, the number of “essential” services continue to rise, meaning the aggregate costs of telecommunication services keeps going up. Up to 4% of annual revenues spent on telecom-related expenses BUT: Without actively managing those expenses, most companies overspend by 10-20% And waste valuable employee time just paying the bills This can mean: Thousands or Millions of dollars essentially being thrown away! Clearly there is a need for more effectively managing the communication expenses within all organizations, but especially for those with millions at stake. Managing telecommunications expenses is not just a good idea, it is essential for organizations of all shapes and sizes due to the amount of potential savings that can be realized. Telecommunications Expense Management offers a better way. Unfortunately, it requires expertise and technologies that most companies lack. That is where companies such as TeleManagement Technologies come in. TeleManagement Technologies provides a company with the expertice and the technology to realize the huge potential savings that come from actively managing telecom expenses. With that I’d like to turn it over to TBD, to discuss how TeleManagement Technologies and their WinBill product helped TBD save $$$.
  • We went from the Stone Age to the Space Age when we acquired WinBill. Fred Flintstone meets George Jetson. We experienced ROI the first month we implemented WB.
  • It’s all about being able to see telecom budgets as an overlay to the telecom infrastructure and the ability to analyze the technology as well as the financials.
  • Winbill is central to the lifecycle. But the process itself is the most important thing.
  • Mergers aren’t too common, but upswings and downturns in the business cycle are common for all companies.
  • Consistent increases in audit recoveries since we shed our home-grown database and acquired one with more automation and better reporting capabilities.
  • A TEM database is a must, but implementing it can be complicated. The software provider is a key partner in making your process successful because the TEM database has to tie everything together. The TEM software provider has to understand your needs and be able to match them to the system’s capabilities. Your TEM process has to be your own because every company’s needs are different. The software has to be scalable and adaptable.
  • Use multiple points, if necessary.

Transcript

  • 1. Strategies for Solving the Telecom Expense Dilemma Thursday, December 11, 2008
  • 2. Today’s Presenters Gary Williams Co-Founder and Director of Sales & Marketing TeleManagement Technologies, Inc. Susan McNeice Program Manager OSS/BSS Global Competitive Strategies (OSSCS) Stratecast, A Division of Frost and Sullivan Rob Keough Project Manager - Accounting System & Support Kansas City Power & Light – KC P&L
  • 3. Polling Questions To gauge audience response, please respond with the best suitable answer. Please disable your popup blockers. Live Q&A Send your questions by clicking on “Ask the Presenter” button on your interface eBroadcast On-Demand A recording of the eBroadcast will be available at www.ebroadcast.frost.com/tem Give-Aways All registrants will be entered in to a drawing for a $250 Mastercard Welcome and Housekeeping
  • 4. Agenda
    • Why you should care about telecom expenses
    • What is Telecom Expense Management?
    • Customer Case Study
      • How KCP&L benefits from active telecom expense management
    • Solutions for Managing Telecom Expense
  • 5. Susan McNeice Program Manager OSS/BSS Global Competitive Strategies (OSSCS) Stratecast, A Division of Frost and Sullivan
  • 6. Why Actively Manage Telecom Expenses?
  • 7. The Bottom Line: Better Use of Your Company’s Time, Money & People Telecom Expenses Essential for ALL Business 4% of Annual Revenues
    • 10% to 20% (or more) wasted
    • Hundreds or Thousands of invoices
    • Up to 65% of invoices subject to late fees
    • Staff to process and audit bills
    • Thousands or millions of $s lost
    • People, money and time wasted
  • 8. The Opportunity Cost of Unmanaged Telecom Expense 375 hrs/month? (2.25 FTE) $7.5 Million?
  • 9. Telecom Expense Management (TEM)
    • Financial
    • Inventory & Provisioning
    • Contractual
    • Business Intelligence
    Telecom Expense Management
  • 10. Telecom Expense Management - Financial Financial How and when are invoices received? In what format? How are these entered into internal systems? Due date? Late fees? How long does it take to process an invoice (and how many people)? Data entry mistakes? How do you allocate costs? Can you flag expenses that vary from budget? How are expenses tracked? Are these expenses used for future budget planning? Who approves and how long does it take? How does information get to the approver(s)? How and through what systems do payments actually occur? Is there a way to automatically identify billing errors? Is there a way to correct billing errors?
  • 11. Telecom Expense Management – Contractual Contractual What are the current contracts? Service availability? Service acceptability? Repair response time? Are current contractual obligations being met? Are penalties or bonus provisions in place (and being enforced?) Are the best contracts (price, QOS, utilization) in place? How do you identify contractual variances? Is contractual information tied with financial information?
  • 12. Telecom Expense Management – Inventory & Provisioning Inventory & Provisioning What telecom resources and services are currently contracted? Are these resources and services fully utilized? Are there any that are under-utilized or not utilized at all? When a new resource or service is provisioned, how is it tracked? When an existing resource or service is discontinued, is there a way to verify? Are your companies internal resources designed optimally for utilization, QOS and cost? Is inventory information tied to financial information? Do you have an inventory system? When a service or resource is provisioned, is the inventory system notified? When a service or resource is de-provisioned, is the inventory system notified? Is inventory information tied to contractual information?
  • 13. Telecom Expense Management – Business Intelligence Business Intelligence Can you mine and use the vast amount of data generated by telecom invoices? Can this data be tied together with other data from the organization? If the data is accessible, what is the lag time of the information? Can your telecom expenses be categorized? By service/ equipment type? By service provider? Can exceptions in the data be noted? Can current usage trends be used to forecast future expenses? By Vendor? By Corporate Hierarchy? Other ways? Can trends in the data be identified?
  • 14. Key Points
    • Telecom services play a key and growing role in business
    • Individual service costs decrease, but Total expense rises
    • Up to 4% of annual revenues being spent on telecom
    • 10-20% Overspending + Wasted Employee time
    • Actively managing telecom expenses not just a good idea
    • Essential for all organizations due to potential saving
    • Telecom Expense Management offers a better way
  • 15. Rob Keough Project Manager – Accounting System & Support Kansas City Power & Light – KC P&L
  • 16.
    • 1997 – Aquila TEM process out sourced
      • Reporting detail inadequate for FERC and PUC requirements
      • Slow payment process
      • Inadequate inventory detail
      • Generalized expense allocation
      • No coordination between Finance and IT
      • Loss of control, communication throughout service life cycle
    • 1998 – TEM evaluation project
      • Process evaluation
      • Details added from LEC CSR reports, physical site surveys
    • 1999 – TEM process in sourced
      • Access inventory/expense audit database
      • Enhanced reporting and improved audit capabilities
      • Life cycle TEM process finalized
      • No automation, no communication with PeopleSoft
    • 2002 – Audit Software RFP and Evaluation
      • WinBill acquired, tested and implemented
      • Audit staff reductions, error reductions due to automation
      • Much improved reporting and audit capabilities
      • Strengthened TEM process
    • 2008 – KCPL acquires Aquila, inherits WinBill process
      • TEM evolution begins again
    Aquila TEM Evolution
  • 17.
    • Holistic Telemanagement Process TM
      • 90% of audit recoveries from the cradle or the grave
      • Interdepartmental cooperation and oversight
    • Centralized MAC process
      • Provisioning, approval, technical documentation
    • Centralized inventory/expense audit database
      • Automated vendor expense importing/auditing (60%)
      • Audit recoveries average 10% annual spend
      • At-a-glance historical trend analysis
      • Fixed spend variance analysis reporting
      • Improved efficiency, less labor intensive
      • Automated batch process to accounting system
    • Finite expense allocation
      • Enhanced budget planning and oversight drive costs downward
    • Detailed audit recovery tracking – How much are you worth?
      • Documentation for vendor disputes, performance management
    • Strategic Sourcing: Procurement, IT and Finance
      • Contract compliance tracking, proactive bargaining
    WinBill – Keys to Success
  • 18. KCPL TEM Lifecycle The TEM System should be the center of your TEM Process.
  • 19.
    • MO gas-only sale to Empire - 2005
    • All MI & MN properties sold to Wisconsin Power - 2006
    • Changed Conferencing Providers - 2006
    • KS electric-only sale to Mid KS Electric Co - 2007
    • Multi-state VOIP rollout - 2007
    • SBC acquires AT&T, Cingular Wireless - 2007
    • Wireless Providers enforce analog sunset - 2008
    • IA, KS and NE gas properties sold to Black Hills Corp - 2008
    • MO electric properties sold to KCP&L - 2008
    Upturns and Downturns to the business cycle are caused by both internal and external forces. Your TEM System should equip you to cope. Managing Change
  • 20. Historical Audit Recoveries
  • 21.
    • Customization
      • TEM processes vary. TEM databases must be adaptable.
    • Innovation
      • TEM processes change. Software developers must be responsive to a changing environment.
      • Telecom services, technology and billing are ever changing. TEM software has to keep pace.
    • Customer Focus
      • Telemanagement is a complicated process. Training and support are mission critical.
    TEM Software Provider
  • 22. Gary Williams Co-Founder and Director of Sales & Marketing TeleManagement Technologies, Inc.
  • 23. Why TEM?
      • You Can’t Manage what You Don’t Know
          • Audit
          • SOX Requirements
      • Time saved
          • Automated Billing
          • AP/GL
          • HR / Database / Systems Integration
  • 24. Why TEM
      • Contract Management
        • Spend minimums
        • Cost Per Minute (CPM) based rates
        • Call or Duration Volume
        • Percentage based
        • MARC and SUB-MARC
        • Vendor Contacts
        • Payment Terms
  • 25. Why TEM?
      • Understanding Your Asset Base
          • Valid Inventory
          • Appropriate asset utilization
          • Paramount when switching services or vendors
      • Big Picture
          • Detailed spend information
          • Validate billing
  • 26. Current TEM Related Issues
    • Billing errors are still prevalent in all carriers’ billing systems
    • Most companies do not have a centralized ordering system and inventory
    • Manual tracking of IT data is error prone and cumbersome
    • Visibility of expense information is not usually available to the right people
    • Contractual agreements need to be verified and managed
  • 27. Billing in Today’s World
    • Multiple vendors with different billing formats confuse end users
    • Manual data entry is error prone
    • Most telecom bills are incorrect in some way
    • Wireless plans are frequently set up incorrectly
    • Non-profit organizations are often billed for taxes
    • IT needs to send expense data to Accounting for bill payment
  • 28. How Did We Get Here?
    • Mergers and Acquisitions Change Billing
    • Wide use of Wireless Devices, Laptops and Telecommuting increase billing and expense
    • Continual Wireless Plan Changes Require Action
    • Industry evolution favors automation
  • 29. Available Options for TEM
    • Purchase TEM Software Solution
    • Outsource TEM Process – BPO
    • Outsource TEM Process - SaaS
    • In-House Solution – May be costly due to customization of features
  • 30. Conclusion
    • Companies need TEM to Manage IT and make better use of financial and technical resources
    • Billing has not been streamlined and made easier for the end user
    • Expenses can be reduced using TEM
  • 31. Audience Q&A Rob Keough Project Manager - Accounting System & Support Kansas City Power & Light – KC P&L Susan McNeice Program Manager OSS/BSS Global Competitive Strategies (OSSCS) Stratecast, A Division of Frost and Sullivan Gary Williams Co-Founder and Director of Sales & Marketing TeleManagement Technologies, Inc.
  • 32. Giveaway And the winner is…
  • 33.
    • A Recording of today’s eBroadcast will be available by visiting: http://ebroadcast.frost.com/tem