As modern IT continues to evolve from traditional asset management to subscription-based management, enterprises are challenged with how to best address the onslaught of new expense categories, like cloud computing, SaaS, IoT and more. In order to properly manage service usage and relate it back to business performance, enterprises are turning to TEM providers, who have the experience, expertise and framework to solve the challenges of managing these new IT spend and asset categories. In this blog, we’ll discuss what’s driving the expansion of these new spend categories, how they align with TEM and best practices for using TEM to manage subscriptions and services.
There are five key areas driving the expansion of TEM-like spend management to the rest of IT: Hosted Telephony, SaaS, IaaS, Internet of Things (IoT), and Utilities. On the hardware side, traditional telephony infrastructure is being replaced by cheaper and easier-to-scale hosted telephony technologies (SD-WAN, UCaaS). Meanwhile, SaaS is driving the overall enterprise software market, transforming the traditional asset-based, large vendor-oriented market into a telecom-like market requiring the management of hundreds of vendors.
IaaS, also known as cloud computing, is also continuing to expand. The free tiers often available from IaaS vendors make it easy for users to create a “free” account. However, these can quickly balloon into an expensive monthly liability that no one is managing. IaaS provides a particular challenge because of this simplicity of sourcing and ease of renewal, as well as rapidly-redefined and new services and a lack of billing standardization.
The Internet of Things (IoT) is expected to multiply by roughly three times over the next four years. These devices require support very similar to the capabilities developed by TEM and Managed Mobility. On a more traditional note, TEM-like cost analysis can also drive efficiency and lower costs in the usage of utilities such as power. This is especially important for organizations with data center investments, which will continue to be an important aspect of enterprise IT for the next 5 to 10 years or more.
As legacy assets and equipment are replaced by SaaS, IaaS, and other leases and subscriptions, IT cost management must become more granular and provide more visibility and flexibility. Enterprises can help achieve this by following the lead of a TEM framework.
Telecom Expense Management provides a framework that can be replicated and leveraged for managing these new spend categories. The following six core areas (inventory, invoices, users, contracts, service orders and disputes) of TEM can be used to organize the management of IT subscriptions. When used together, they ultimately lead to a seventh category: vendor optimization. Here’s a short intro to how TEM categories overlap with subscription management.
When these six areas are practiced, vendor consolidation and standardization is the result. The organization gets clearer on what it is actually using, how to enforce vendor agreements, how to cut costs and how to govern processes. According to Amalgam Insights, by taking a TEM-based approach to IT subscriptions, IT departments have the opportunity to reduce cloud-based expenses by 30% or more. They also gain the strategic visibility needed to treat IT as a profit center and a strategic business differentiator.
To learn more about using TEM for non-traditional IT expense management, download our new whitepaper or watch the Calero World Online session, “From TEM to ITEM: Leveraging TEM for Non-Traditional Expenses.”
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