The average enterprise spends roughly 4% of its revenue on
telecommunications. A quarter of that spending often results from a
combination of under-utilised inventory, uncontrolled purchasing,
and billing errors or overpayments.
According to a recent Aberdeen study, 1% of a typical business's
revenue is blown on costs that could be avoided or are errors. For
a huge company, that can translate to millions of dollars a
year.
There's a fairly new breed of software out there called telecom
expense management (TEM), designed to curb overspending and find
telecom billing errors before payment is sent. The goal of TEM is
to allow enterprises to regain control of their telecom
spending.
There are literally dozens of TEM vendors now, including
AnchorPoint, Asentinel, Invoice Insight, Market Data Services Ltd.,
MBG, QuickComm, Rivermine, Secure Path and Tangoe.
QuickComm makes software that can read and normalise invoices in
one database and weigh them against the infrastructure. The bill is
entered into the system and is checked for errors and deviations
from contractual agreements, and is even scanned to determine
whether all lines and devices being billed for are still in use.
After the bill is scanned, users see either a red light, meaning
there are problems, or a green light, meaning they can pay the
bill, QuickComm CEO Mark Evans said.
For example, Evans said, one company that has several thousand
cell phones deployed throughout the company ran QuickComm software
and found there were 3,500 cell phones still being billed for that
belonged to employees who had since moved on. The cell phone bills
for former employees were costing upwards of $1 million a year.
Evans said another company, a national bank with more than 1,000
branches, ran QuickComm and found that they were still paying for
data and telecom services to five branches that had been closed for
months.
Since most enterprise bills can be stacks of paper two feet tall,
it's unrealistic to think that someone is manually combing through
them to find errors and save a few dollars, Evans said. A typical
Fortune 500 company spends $116 million per year on telecom, and it
processes more than 15,000 invoices. There isn't enough manpower to
effectively manage telecom expenses without automating and
streamlining the process.
Evans said that the QuickComm system can link to ERP systems for
payment or link back to Human Resources to check against employment
records.
Software like QuickComm can be used in different ways. It can be
on premises or hosted. If hosted, the user can access it through a
Web portal.
"The CFO has always known the phone bill has been wrong," Evans
said, "but what they're doing now is understanding they can do
something about it."
According to recent research, 7% to 12% of all telecom service
charges are due to error. This can lead to more than $8 million per
year in overcharges for large enterprises. Many bills, as many as
85%, go unchecked.
Currently, the TEM space is taking in $240 million in annual
revenue, and Gartner Inc. estimates that will increase 20% over the
next four years.