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Controlling the Unified Communications-as-a-Service (UCaaS) Spend Explosion

Updated January 19, 2022

Now more than ever, businesses in this globally connected world are turning to Unified Communications (UC) and Unified Communications as a Service (UCaaS) solutions to enable seamless collaboration. 

The pandemic sparked a move away from traditional telephony and a growing shift towards cloud-based solutions, largely driven by the need to support the work-from-home (WFH) response to the pandemic. Now, business leaders understand the value of adopting UCaaS systems for enhanced business agility and employee productivity.  

However, despite its many benefits, the transformational switch to UCaaS can be troublesome for businesses that depend on traditional expense tracking systems. Without a clear understanding of consumption, costs, pricing and services, UCaaS spending can be difficult to understand and control.

In this article, we explore the factors contributing to the UCaaS spend explosion and explain how businesses can take back control with a UCaaS expense management solution.

UCaaS Expense Management vs Technology Expense Management

The concept of unified communications has been around for years, but the pandemic has compounded it as a necessity in organizations by enabling employees to collaborate from anywhere and on any device. 

At its core, unified communications provide and combine multiple enterprise communications channels, such as voice, video, personal and team messaging, voicemail, and content sharing for greater business agility. The unified communications-as-a-service model makes the comprehensive technology stack more accessible as UCaaS is hosted by a provider, meaning you don’t need to invest time and money in setting up and maintaining your own infrastructure. 

However, this subscription-based service holds new challenges for business leaders due to a lack of visibility to expenditure and usage, leading to inefficiencies and lost savings. That’s where a UCaaS expense management solution can bring significant value.

A UCaaS expense management solution ensures that while employees continue to use the right communication tools, it provides the enterprise a granular insight into how cloud-based UCaaS usage can be optimized to benefit their bottom line.

While technology expense management (TEM) solutions tend to focus on more traditional provisioned and billed IT expenses, a UCaaS expense management solution dives into the 21st century to bring visibility into cloud-based subscriptions, usage and licenses, which can be a significant source of waste,  if not properly managed.

The 3 Vs and the UCaaS Spend Explosion

On the surface, cloud-based solutions like Zoom seem like a simple, efficient way of ensuring seamless communication — and in many ways, they are. UCaaS platforms keep teams productive and portable for enhanced productivity. 

However, business leaders can run into certain hidden pitfalls when implementing UCaaS systems, causing them to lose control over their spending. We refer to the three main challenges of UCaaS as the three Vs: volume, variability and visibility. 

1. Volume

Since the pandemic sparked an overwhelming boom in WFH, manually tracking virtual meetings, users and call data have become virtually impossible with traditional methods like spreadsheets or even the vendor billing. Even before the pandemic struck, larger companies with employees based all over the world struggled to effectively manage all this UCaaS data.

In addition, monitoring large volumes of subscription and licensing expense data is no longer feasible. Managing UCaaS expenses in this way isn’t only inefficient, it also leads to an increased risk of human error and more serious oversights. Adding human error into the mix will potentially result in inaccurate or incomplete data, meaning business leaders are unable to make reliable cost-saving decisions for the business. 

2. Variability

No two UCaaS platforms are the same. While the majority of platforms offer a universal approach to online communication, pricing, contracts and features differ significantly depending on the provider. In addition, UCaaS platforms lack a standardized pricing structure, making it challenging for business leaders to accurately compare providers and obtain the best deal for their budget. 

Without useful, actionable data from UCaaS providers, business leaders struggle to negotiate the most efficient contracts with providers, leading to cost unpredictability and wasted dollars. Business leaders risk overspending on UCaaS services they don’t even need due to a lack of available data on consumption costs. 

3. Visibility

Failing to acquire visibility into UCaaS usage and consumption cost results in a lack of control over UCaaS spending. Business leaders require granular data on consumption, the number of users and license distribution in order to identify efficiencies and potential manage chargebacks.

Moreover, financial teams have to juggle multiple dashboards and various data troves to keep on top of spending. Not only is this impractical, but it’s also a waste of time and can lead to serious — and expensive — oversights

For example, our research shows that a whopping 60% of Enterprise UCaaS subscriptions aren’t used. This underutilization of platforms implies a substantial waste of money.

Reduce Costs with a UCaaS Expense Management Solution

According to Gartner’s Telephony Is Dying report, 80% of organizations will prioritize collaboration and meeting platforms over voice-only telephony, which is a huge leap from just 30% in 2019. With companies moving towards a more flexible, hybrid way of working, business leaders were able to reassess their needs and implement UCaaS systems.  

To ensure organizations gain the full benefits of their UCaaS solutions, forward-thinking business leaders must ensure they achieve cost optimization and reduce their expenditure by implementing a UCaaS expense management solution for lowered costs and better data insights. Organizations can harness the power of UCaaS expense management for greater cost efficiency in five main ways: 

Visibility and Reporting

A UCaaS expense management solution provides the enterprise with valuable insights from UCaaS vendors, identity management solutions and API-native integrations so that finance teams can eliminate waste and optimize UCaaS expenditure and consumption.

Moreover, a modern UCaaS system can provide near-real-time reporting and alerts on consumption of various services against any allowances or limits. Consequently, if overages are likely, the enterprise can take appropriate actions such as changing the behavior of the users that may be driving a spike in consumption, or modify the plan or limits of the features to avoid very expensive overage charges.

Predictive Analytics

An expense management application with the ability to pull data directly from an organization’s UCaaS solution empowers the enterprise to not only have visibility to granular levels of cost and usage, also the data with which to make informed business decisions on how best to optimize the explosive growth of cloud-based consumption. Enterprises can utilize predictive analytics to examine consumption data for any type of service (telephony, IM, Video conferencing, Meetings etc.) at any level (location, department, unit and user etc.), as well as across the entire organization, to identify cost inefficiencies and improve budget allocation.

Call Validation

UCaaS expense management solutions incorporate the capabilities of established call accounting systems to validate call records against contracted rates. The system will identify discrepancies in usage, as well as provide visibility and reporting down to the user, so that enterprises can manage usage and drive calling plan optimizations - user by user.

In a UCaaS environment with a typical large enterprise generating millions of call records monthly, call validation can generate significant savings for businesses.

Usage and Cost Optimization

An effective UCaaS expense management solution will offer a holistic overview of UCaaS consumption and provide recommendations on how enterprises can optimize their usage for greater cost savings. The solution will make it much easier to quickly identify unnecessary and redundant services and costs and significantly increase the value of their UCaaS dollars.

Automatic Cost Allocation

The right UCaaS expense management solution enables integration with your the general ledger and HRIS system for automatic cost allocation to each employee across the organization. By reducing the resources spent on tedious tasks like data entry and removing the risk of human error, the UCaaS management solution provides a complete lifecycle solution for processing, validating, allocating and optimizing your UCaaS environments.  

Regain Control of your UCaaS Expenses with Calero

Discover, manage and optimize your UCaaS subscriptions with the unified management platform from Calero. Gain full visibility into your UCaaS consumption and cost to identify underutilized subscriptions and discover optimizations for immediate cost savings.  

Contact our experts today for a free consultation and explore the benefits of our one-stop-shop solution for effective UCaaS expense management.