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Business Internet and Technology

The Financial Case for Telecoms Expense Management

The functional groups that get involved in developing a business case for Telecom Expense Management often include: IT, Sourcing, Finance and Global Technology Infrastructure Management.
The business case typically includes a detailed review of technology, projected productivity gains and savings for each project.

The refunds and savings to be made from utilizing a Telecom Expense Management program can be used to create a Return on Investment (ROI) business case to cost justify the investment in a system.

Typical identifiable and substantiated savings categories include:

  • Refunds due for unpaid past credits and billing errors.
  • Creation of asset register and asset record cleansing; plus inventory reconciliation with billing.
  • Client identified reductions through inventory reports e.g. obsolete modems previously used on lines that have since been removed.
  • Optimization recommendations.
  • Sourcing savings from new contracts at lower rates.
  • Improved transparency and visibility of expenses.

A return on investment is computed from the following calculation.

ROI = (“Gain from Investment” – “Cost of Investment”) divided by “Cost of Investment”

The cost of “no action” or delayed action should be considered too. Each month, organisations may be forfeiting opportunities to optimize their technology expenses, to save money. Claims for refunds, owed for billing errors, may be subject to a limited claim time period. Without a Telecoms Expense Management system it can be difficult to provide the evidence and documentation needed to support claims. Organisations should therefore recognize that there are real costs if they fail to invest in TEM services.