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Telecom expense management (TEM) infiltrated by mobile device mayhem

As remote and mobile workers introduce mobile devices into the enterprise telecom expense management (TEM) becomes even more complicated for the WAN manager -- who

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is already bogged down by juggling multiple telecommunications vendors. As companies of all sizes try to get a handle on mobile expense management for employees with different job functions, a cloud-based mobile TEM service may provide the answer. In the first article of this three-part tip series, we discuss how mobility changes telecom expense management. Skip the table of contents below to learn more about telecom expense management (TEM) or view the other tips in this series:

Table of contents:
Part 1: Mobility complicates telecom expense management (TEM)
Part 2: Mobile telecom expense management: Where to cut costs
Part 3: How to measure mobile expenses

For decades, in companies of all sizes, global network architects and engineers have contended with the challenge of managing their telecom service expenses. The fact that the problem is nearly universal and so long-standing means that most WAN managers believe at some level that they have it under control. In a 2011 survey of 277 businesses, CIMI Corp. found that more than 70% said they were managing their telecom expenses successfully. While that may be true overall, it may not include the impact mobile devices will soon have on their telecom expense management (TEM) strategy.

Over the last five years, we have seen arguably the most significant trend in the knowledge-driven empowerment of workers since the advent of the PC -- when all wireline black phones and leased lines were pretty much alike. Now mobile broadband and appliances like smartphones and tablets have created completely new work practices, ranging from the "work at home" to the now-popular "homeless worker" who is empowered to work 24/7 everywhere and anywhere. Unlike the near-uniformity of black phones and leased lines, mobile broadband appliances are famous for their differences. And those differences are reversing decades-old confidence in the management of telecom expenses.

When the 70% of survey respondents who were managing their telecom expenses effectively were asked if they were managing their mobile telecom expenses effectively, a full 75% said no. Mobile services are making telecom expense management (TEM) a lot more complicated than it used to be because they add a multidimensional problem into the whole telecom expense management process. Here are four main reasons why:

  • First, mobile-device use is exploding in the enterprise, which means more mobile bills are being presented for corporate payment or reimbursement.
  • Second, mobile access is of varying value to the company, so there isn't a straightforward way to compare costs and benefits of mobile usage.
  • Third, an enormous number of mobile devices are involved, each with multiple service types and charges.
  • Finally, usage caps, usage charges and plan details differ not only by operator, but often among the devices the same operator sells and supports.

Mobile telecom expense management (TEM) makes planning more complex

Beyond the existing mobile telecom expense management (TEM) complications, mobile expenses also alter the nature of future service expense planning. Wireline telecom costs have declined slowly and steadily over time, and pricing has tended to stabilize. The net result has been a gradual reduction in overall costs. With mobile, voice expenses have also declined over time, and in many cases, SMS charges have declined. Data plans, however, appear to be reversing historical price declines as lower usage ceilings and higher data-overage rates create major differences in mobile costs from user to user. Enterprises report that their heaviest users can cost the company 10 to 12 times more than the basic service plan each month on usage charges alone.

Mobile plan costs have also rapidly changed, and with so many plans available to a business, getting every employee on the best plan is frustrating at the very least. Companies can analyze their costs and pick a new plan set, then find out in the interim that the operator's whole plan structure has changed, or a new operator with a different plan structure has emerged as a contender.

The net effect of all of this mobile growth is to make traditional, centralized TEM based on packaged software more and more difficult to justify. To handle the changes, many enterprises are turning to a more distributed analysis of mobile expenses (by department or other organizational division) rather than trying to analyze costs on a company basis. The benefit is that the implications of a given employee's expenses are more easily analyzed at a lower organizational level, where the reviewer knows what an employee's legitimate mobile use would be. The distribution of responsibility also makes it easier to quickly assess costs and alternatives. The problem, however, is that distributing TEM software to departments, or even distributing access to it, has already pushed up software support costs and created a monumental training effort.

Cloud-based TEM as a Service could track mobile usage

The cloud offers a solution to telecom expense management (TEM). Like all cloud applications, cloud-hosted mobile TEM is inherently distributable. TEM as a Service can be obtained at a low cost, or even free, for basic applications, which would enable a company to distribute TEM responsibility as needed. Cloud-TEM providers can keep up with plan and cost trends, as well as focus on a low-maintenance graphic user interface (GUI) that reduces support and errors. In fact, TEM may well be an application perfectly suited to cloud computing.

Cloud-based mobile TEM isn't simple, however. Planning and implementation discipline is required to make a cloud-TEM project for mobile devices and usage work. Fortunately, the market has contributed some insights into both planning and implementation, and keeping these in mind can help to assure a successful TEM outcome.

In this next article, Tom Nolle discusses where network managers can cut mobile telecom expense management costs.

This was first published in April 2012

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