To Infinity and Beyond: The Changing Telecom Environment

Leo Berz

While I have no doubt that our friend Buzz Lightyear from Toy Story had something in mind other than Telecom Expense Management (TEM) when he first uttered those now famous words, “To Infinity and Beyond,” I still think it’s applicable to the discussion of telecom. Most of us early TEM adopters who helped shaped the industry in the late 80’s and early 90’s thought that TEM was the end all approach to controlling telecom costs, but we were proven wrong as our world started to change.

THE CHANGING WORLD OF TELECOM

First, the wireless revolution exploded as phones small enough to carry emerged, while service expanded and usage rates dropped so that average income earners could afford them.

Next, the Telecommunications Act of 1996 opened up competition for local service providers, C-LECs (Competitive Local Exchange Carriers) increased, and number portability made it easy for users to switch to a new carrier while still keeping their same phone number. Additionally, telecom consolidation of the late 1990’s and early 2000’s resulted in a few pre-dominate providers of telecom services. And of course, we can’t forget to mention the technology revolution that brought us high speed IP networks, the ability to watch streaming movies in HD on phones, the proliferation of cable TV providers delivering phone, long distance, internet and Toy Story in a single bundle, or that local tariffs are giving way to negotiated agreements in more and
more markets.

MANAGING A COMPLEX TELECOM NETWORK

In today’s complex telecom environment, TEM falls short of the MARC (Minimum Annual Revenue Commitment) in cost control, which is why best practice companies are implementing Telecom Lifecycle Management (TLM) programs as a holistic approach to be proactive in managing telecom investments. TLM is a never-ending revolving process that layers strategic sourcing, order management, and contract management into traditional TEM. As you evaluate your TLM program, keep in mind the following:

  • Strategic sourcing consists of technology evaluations and a series of procurement activities as part of a long-term plan for accruing the right solution at the best price and under the best contractual terms.
  • Order management is the critical policy enforcement process to ensure that your employees are ordering services per pre-defined policies and established contracts to get the best price while minimizing the risk of shortfall penalties. When errors or disputes arise, as they often do, it’s the order management program that provides the documentation to quickly resolve the issue in your favor.
  • Contract management tracks contracts, business terms and pricing and makes them readily available to anyone who may need to access this information. Another key attribute of contract management is tracking and notification of expiration dates to prevent unwanted auto-renewals and ensure sufficient time to negotiate a favorable agreement with
    any supplier.
  • Traditional TEM is still the cornerstone of any cost control program, as it provides the critical audit, inventory, cost allocation, bill payment and reporting functions.

While a TLM program can on the surface be more expensive than traditional TEM since you need to cover the costs for added functionality and coordination (regardless of this being done in-house or through trusted partnership), the value and return on investment is considerably higher. This approach will result in increased efficiencies and a lower total cost of ownership that will continue to perform year-over-year as you fine tune your network and procedures. Since I started this blog with a quote from one of my favorite personalities, I thought it’s only best to end with a quote from another one so, “That’s all folks!”

Learn how Ecova’s Telecom Lifecycle Management service can help you navigate the ever-changing telecom environment.

Related blog posts:
Telecom Sourcing―Negotiating Costs & So Much More!
Strategic Sourcing: The Key to Telecom Lifecycle Management

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