There’s a huge source of valuable insights that we frequently miss
It’s easy to see industry trends by looking at hard data, but this approach offers no deep insights about people’s more nuanced experiences inside an industry. In fact, we frequently miss critical insights precisely because we don’t take the time to really listen to what people have to say in longer conversations. This is in fact, the entire rationale for having focus groups – it’s a chance to really probe for meaningful thoughts in deep discussions.
With this realization in mind, we started looking at the rich veins of thought and observations on our industry – telecom expense management (TEM) – that were actively being generated by well-placed industry veterans on LinkedIn discussion boards. We have summarized (for brevity and flow only – the substance is unchanged) the contents of one particular thread and are enthusiastically sharing this information (along with our thoughts on the discussed topic) with our loyal readers! The topic was…
Why are there differences of opinion between IT departments and TEM providers?
Commenters attempted to dissect why IT and TEM experts appear to have a certain misalignment in the way that they evaluate the true worth of TEM services. Throughout the discussion thread, there were obvious opposing viewpoints, but the discussion was, overall, focussed on not only honestly discussing issues, but to also suggest positive improvements to the way that IT managers and TEM providers could cooperate to jointly optimize IT spend. Their summarized comments follow, and are presented in italicized text (our response is in normal font). Read on for deeper insights on TEM!
A matter of not fully appreciating the value of TEM
A very important and primary point made on the LinkedIn discussion board was that IT managers who don’t deploy TEM solutions have some misunderstandings about the added value of external (to the company) TEM providers’ expertise in managing IT and telecom spend. Two misconceptions stand out:
- IT managers, because of their high levels of both competency and responsibility, feel that they already have all the tools necessary and do not want to invest resources on duplicate services (by hiring outside help – basically, outsourcing).
- In a (perhaps) related vein, savings uncovered by outside parties may reflect poorly on them.
A number of commenters indicated that they had come across such sentiments in their experience, while others highlighted the importance of pinpointing the source of these feelings. They noted the following:
- IT departments tend to have huge workloads in dealing with non-financial matters that have very immediate deadlines; because cost management is a slower, more long-term activity, it’s often given a much lower priority.
- Relatedly, IT managers may also find the task of meeting with a third party as just another form of stress.
- The CIOs, IT directors, and IT managers for whom maximising the value of IT investments is a core priority are the ones most likely to consider third-party TEM services.
Issues of price focus
Having a less-than-full appreciation of the value of TEM further leads to a focus on selecting TEM providers (if this is done at all) based on price leadership alone. Since most TEM providers offer different levels of management, with the lowest-cost option largely consisting of only offering a tool (without support or the furnishing of expert consultancy on management), the cost-only approach to selecting providers is bound to contribute to companies having poor experiences with TEM.
A separate (but related) issue on price was raised. Some commenters noted that numerous companies have difficulties with billing validation. Notably, many businesses have difficulty ensuring that they are paying the rates that they’ve negotiated. By not opting to have TEM providers expertly validate billing, there is no real lifting of this uncertainty.
The most common observation on this matter was that IT managers, experts though they may be for technical matters, do not have the necessary experience or training to efficiently identify their own payment discrepancies. The allusion was that, in trying to save money by having IT managers validate bills in-house, companies end up paying more in overtime costs (as it will take IT staff more time than usual to verify payments) and/or even more errors.
What steps need to be taken going forward?
As the discussion evolved, commenters helpfully noted that TEM could (and perhaps should) be seen as a core issue tobusinesses. To actually help their customers, TEM providers need to furnish benefits far beyond the cost reductions realized following initial audit. These benefits should include:
- Cutting inventory costs
- Furnishing accurate expense reporting and cost allocation
- Giving Up-to-date inventory information
- Encouraging accountability of IT usage
- Producing trend reports
- Helping clients work smarter
- Reducing support calls
- Implementing compliance
- Driving revenues
Essentially, quality TEM should act as an extension of the business that is purchasing its services.
The importance of working together
Finally, a commenter noted that, in order to deliver a greater level of value and increased acceptance of hiring TEM providers by a company, it is important to involve the IT department as much as possible. Ultimately, best results will only be had when TEM providers collaborate with the IT department in such a way so as to make them the ‘company hero’. TEM providers’ services should highlight IT’s ability to know how and when to seek/implement valuable advice obtained from external experts.
Cimpl’s position on this question
We definitely see that a key reason for which IT departments forgo external TEM services is a lack of awareness regarding their value. Educating others on the benefits of a possible solution is the best, most productive, course of action.
This education starts at how to choose a TEM provider. The sole criteria must not be (low) price. The quality, scope, and level of services must be considered. Choosing the cheapest option typically means that a company has opted for a level of service that is far below what they actually need.
The education is also obviously not one-sided. TEM providers must also educate themselves about their clients’ needs when providing services. It is extremely important that they develop a meaningful, value-driven relationship with their customers by working diligently and constantly delivering insights and marketplace data. This customers to go beyond the simple management of their telecommunications and enable them to improve overall efficiency.
Essentially, both client and TEM provider need to mutually educate one another. It is essential that the service-provider understands their clients business and its inner workings and is educated by the customer accordingly. On the IT department side, it is essential that they are informed on the best adoption practices and understand exactly what needs to be done to operate their TEM software in the most effective manner. The word that best describes this relationship is synergy: A collaboration between two or more parties that produces results greater than each body working individually.
I hope that was helpful; it certainly gave us food for thought. We also want to hear your opinions on this question; please leave your observations below! In the meantime, if you have questions about TEM, contact us – we’re Cimpl, Canada’s leader in IT and telecom expense management, and we would be delighted to share our expertise on managing your technology expenses!