How Telecom Expense Management Can Work for IT


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Telecom Expense Management (TEM) can help IT managers decrease mishandled telecommunications bills. Many corporate telecom bills include overcharges due to in-house and carrier-related mismanagement. TEM services can significantly reduce telecom costs by helping IT managers discover and remedy some of the following common billing errors:

  • Charges relating to unused or disconnected telecom services, including expired maintenance contracts.
  • Carrier data-entry errors, such as duplicate or incorrect telecom charges and erroneous surcharges, such as inapplicable taxes.
  • Charges due to in-house misuse and unauthorized use.

2 Comments

  • B3c8cb0cd33480953c4dac06485a4c4b comment
    Steve Groves | 06-29-2010

    Very good overview of the issue but some additional detail and guidance would be helpful. Shared Gain versus fixed cost and what a reasonable amount to pay in either case might be as a percentage of savings or monthly spend.

    • 9eb6a2810126f534ebf65557616f34d1 comment
      Info-Tech Research Group | 10-21-2011

      Thanks for your comment. The scope of the note did not include a discussion on costing options.

      Some TEM vendors charge on a flat fee (i.e. fixed cost) basis, some charge according to a contingency model (i.e. shared gain option), while others charge based on a hybrid model. The flat fee costing model involves set monthly payments based on yearly organizational telephony spend; this model makes sense for organizations that have consistent telecom expenses year over year. The contingency model is based on a set percentage of cost savings – and is paid to the vendor after the savings are achieved. The hybrid model involves both costing options – organizations pay a set amount monthly based on a yearly expense model, and when achievable, they pay the vendor a predetermined percentage of any additional cost savings – of course, this percentage is lower than what they would pay with the contingency model alone, given the monthly charges.

      I don’t believe we can recommend ‘reasonable’ percentage rates for the contingency model – given the varying factors contributing to an optimal situation for different organizations (e.g. size of the organization, nature of their telecom needs, location of their carrier – national, regional, etc).

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