Centralizing TEM

Telecom Expense Management: The Case for Centralization by Peter Verhoeff

The area of savings with which people are most familiar is centralized invoice processing. All telecom invoices are collected in one place and compared against call detail records (CDRs). Any discrepancies are noted and handled. Because the majority of billing errors tend to be in the vendor's favor, correcting them can add up to considerable cost savings.

According to an Aberdeen Group report, 65% of enterprises surveyed do not have accurate inventory and service usage data, while 49% of respondents cited lack of automation to manage network expenses. Automated computer-based call accounting software can save huge manpower costs. In selecting vendors, preference should be given to choosing one that provides electronic invoices that can be fed directly into the computer, without the need to enter the data by hand.

A further side benefit is that a computerized call accounting system facilitates chargeback to the various departments, which makes these departments more cost conscious, which in turn will tend to reduce costs further. Centralized call accounting is also more likely to show up instances of telecom fraud, misuse or abuse and facilitate their correction.

The next obvious step is to centralize the payment of invoices as well. This gives management a much better overview of costs and provides greater control over disbursements. Because of its greater clout, the centralized department is in a better position than individual departments to get vendor over billing corrected. Vendor charges for late payments are also much less likely to happen with centralized control, which further adds to the savings.

Centralized payment naturally leads to centralized management, allocation and consolidation of existing telecom resources, as well as the planning for future changes. It makes sense that this aspect alone can save an enterprise considerable expense in avoiding wasteful duplication of services and eliminating unneeded facilities. The result is greater efficiency at lower cost.

Finally, centralized management and planning leads to centralized purchasing of telecom services, which has the obvious benefit of the ability to buy in bulk and to negotiate the best prices. Furthermore, it simplifies budgeting for telecom expenses.

Thus, while from a business standpoint decentralization has many benefits, it makes a lot of sense to centralize telecom expense management.

Author, Peter Verhoeff, writes articles on the business benefits of call accounting and call detail record technology. More information can be found at http://www.telsoft-solutions.com.