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Is TEM giving your company a false sense of optimization

Wednesday, January 9th, 2019

Having completed 300+ telecom vendor billing reviews since 1994, we have seen virtually every type of telco overbilling mistake, as well as the numerous unrelated savings opportunities missed internally. Over the past several years we have noticed a substantial increase in missed savings opportunities directly related to reliance on TEM programs and the inability of these programs to recognize unused (voice and data) services and equipment.

Identifying unused services and equipment is not a function of TEM, but reliance on these programs does create a false sense of optimization, as we tend to believe all information loaded into the system is accurate, which is usually the case, in the beginning!

One of the first steps normally taken when deciding to go with a TEM provider is an inventory cleanup, followed by loading all vendor invoicing and contracted rates into the system. The program is then updated monthly based on adds, disconnects, moves, and pricing changes. Sounds fool proof, but many things can go wrong over time, and it can be very costly to your organization.

We recently removed 300K monthly in unused services/equipment for a client who has been using a TEM program for the past six years – that’s $18 million in savings over a five-year period. How much would your company need to generate in gross sales to net $18 million in profit? While not every organization can or will save $18 million over 5 years, it is very likely that up to 30% of your monthly recurring charges are related to services/equipment not in use or not required. These missed savings opportunities happen gradually over time and often continue for years unnoticed.

Here are a few of the many reasons why unused services and equipment are not identified and removed:

TEM is an excellent inventory management tool if used correctly, updated accurately, and maintained on a regular basis, however it should be complemented by a detailed review every 3-5 years by an experienced third-party telecom expense auditing firm.

Detailed billing reviews take time, a luxury most IT/IS staff do not have. Specific knowledge and experience is required to identify complicated billing errors and unused services/equipment. Specific vendor records (normally not available or offered to the customer) are also required.

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