TEM helps IT organizations analyze how their technology investments are contributing to the top line and controlling the bottom line. The new vision for the industry reflects a proactive best practice framework in which analytics and business intelligence help drive value. It is now growing to include a set of best practice principles that extend beyond telecommunications.
In 1984, the settlement of a federal government anti-trust suit, lead to AT&T’s divestiture of its local telephone system and split into seven independent Regional Bell Operating Companies (RBOCs) or Baby Bells. AT&T kept its long distance network and its business telephone system service. MCI, Sprint and other competitors for long distance and AT&T’s other business entered the market. Billing overcharges provided one indication that AT&T and other carriers were facing challenges adapting to the new competitive environment.
First, customers did not like the reactive approach of billing errors accumulating over several months. They wanted to catch billing errors in the first month or eliminate them. The second factor, which led to TEM, was the search by telecom bill auditors for a better business model. It was difficult for these bill auditing firms to create large firms with a diversified revenue stream from audit work. After the audit was complete, there were no other services to sell customers for ongoing revenue. The third factor driving the market evolution from telecom bill auditing to TEM was that managing telecom expenses had grown to be more complex. Enterprises had to adapt from dealing with one supplier for telecom services to many (in some cases hundreds) of different suppliers. The proliferation of vendors and new telecom services made telecommunications expenses more complex and difficult to manage.
Market participants may have different names for the domains and areas of emphasis in programs vary from management of fixed, mobile and international services, but the eight major domains apply for the three types of telecom bills. Some enterprises have a single TEM Solutions Provider perform all of these functions while others use specialists for particular areas, but regardless of which approach an enterprise selects, an effective TEM program transitions decentralized processes into a unified approach.
In an industry, that serves constantly evolving technology and service offerings, the center of many businesses now exist at the network edge. Increasingly the device is useless without the network. The network’s primary purpose is to manage the connection of devices. This applies to any type of network service, not just voice services. TEM solutions allow organizations to track and optimize employees’ use of devices that connect to the network and effectively manage network utilization. The challenge of persistent and automated cost optimization in this new world is critical to every enterprise.
Convergence of IT and telecommunications has lead to the integration of TEM with IT. TEM helps organizations run their telecom network as a business, and all of IT like a business by tracking the ownership and utilization of all their network assets. TEM helps IT organizations analyze how their technology investments are contributing to the top line and controlling the bottom line. The future vision for TEM calls for Solutions Providers to offer best practices that extend beyond telecommunications. Many organizations are leveraging telecom expense management solutions and applying TEM principles to improve management of other areas of technology.
This new vision for the industry reflects a proactive best practice framework in which analytics and business intelligence help drive value. As long as network and network-related expenses remain among the top five expense items on the profit and loss statement, and the percentage of revenue coming across the network versus a cash register drawer continues to grow, TEM will remain central to the profitability and success of the enterprise. These developments show promise for an industry that is attracting new customers and selling more services and functionality to its existing clients. The TEM market supports many successful firms with growing revenue. Analysts, TEM Solution Providers and enterprises confirm that this is a vibrant growing market.