TEM (Telecom Expense Management) has traditionally been a solution vetted and managed by the office of the CIO, and more specifically a Telecom or IT manager. But there has been an increasing trend within the industry where the office of finance (CFO) has become more than just a little interested in how communications expenses are managed across the enterprise.
Not only is telecommunications one of the top five line item expenses for nearly every organization, but as mobility has moved to the center of a technology revolution, it is now even more critical to empowering workers. In addition, communications in whole has expanded well beyond traditional fixed-line telecom and mobility to include a vast array of options within data and unified communications.
Progressive CFOs and CIOs consider communications as a board room topic. After all, entirely new industries have been built by leveraging emerging communications technologies (think Uber, Netflix, and Amazon). Needless to say, with all the potential that exists, there is an obvious requirement to balance cost management with the strategic need of growing a reliable and efficient communications network.
There have been many recent articles about how the CFO role is expanding to face a broad array of challenges in the areas of global and technology issues. In fact, they are now, more than ever, deeply intertwined with the CIO/VP IT role as they address how the organization manages technology demands – balancing the exploding costs, complexity and risks.
If this is sounding like a big “thumbs up” for the TEM industry, that’s because it is. Let’s breakdown why and how:
Communication-enabled technology makes it possible to receive real-time updates and transfer information to minimize conflicts, bottlenecks and delays. This allows stakeholders to do their jobs more effectively. There are whole industries that rely on the fastest data pipes and most reliable networks as a true competitive advantage.
As discussed earlier in this post, communications can have a profound effect on building entirely new business models. This clearly creates new revenue streams, and empowers the workforce to not only invent, but actually take action.
Communication services improve the bottom line with a positive return on their investment. Financial executives can oversee costs and improve accountability with expense charge-backs to business units for consumption of communications services. TEM programs ensure that spending is optimized, and offer ways to reduce expenses without impacting employee productivity. TEM delivers with reporting on operating expenses by division, region, business unit and employee.
Cost management is important because Section 404 of the Sarbanes-Oxley (SOX) Act requires that CEOs and CFOs of public companies certify the adequacy of their internal controls for recognition of revenue and expenses. TEM automates SOX reporting and storing of financial data for telecom expenses. CFOs can provide assurances to the board and shareholders that there are rigorous controls in place for one of the enterprise’s top line-item expenses.
Telecommunications represents the next step in a transformative era – combining the internet with the modern wireless ecosystem. There are now more mobile users than computer users tethered to desks. This matters to CFOs and CIOs alike – with corporate profits and opportunities for innovation multiplying as more organizations harness the power of mobile technology. The convergence of voice and data networks was big, but the convergence of mobile broadband networks, cloud computing, smarter devices, pervasive connectivity, and the ability to program intelligence around us with the Internet of Things (IoT) is going to be even bigger as it dramatically impacts every industry.
This revolution in communications needs to be managed strategically by both Finance and IT. These executives serve as the catalysts in launching formal initiatives to manage technology and the expenses associated with it. CFOs and CIOs are in a position to understand the challenges of telecommunications expense management and benefit from implementing solutions. CFOs will raise their stature in the organization through improved accountability and cost savings. In turn, CIOs will reap the benefits from shifting wasteful uncontrolled spending on network services to free funds for projects that drive strategic value and competitive advantage.
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Worldwide telecommunication spending is projected to reach $1.6 trillion by 2018, according to Statistica, but many organizations have a hard time managing communication spend. The...