Controlling Chaos – Expanding Beyond Traditional TEM

Controlling Chaos – Expanding Beyond Traditional TEM

February 28, 2025

Tony:

Hello, today is Friday, February 28^th, 2025, I’m Tony Mangino from TC2 and this is Staying Connected.

The complexity and number of ICT-related invoices continues to increase exponentially.  Enterprises are migrating to multi-platform, multi-vendor services, cloud-based solutions with rates that are unclear or unchecked, and away from the “one throat to choke approach to ICT”. Unfortunately, that means a myriad of billing policies, invoices, obligations, differing surcharges and fees and vendors, as well as complex contracts and pricing schedules. It’s hard to wrap one’s head around the complexity of network services contracts and billing,

I’m joined today by my colleagues Theresa Knutson and Frank Zagrodnik to cover more on this topic.  

Theresa and Frank, welcome back to Staying Connected.

Frank – let’s start with you, what do you make of all this?

Frank:

Thanks Tony, great to be back.  

It’s interesting that when you look at polls on top issues that CFOs face, 2 of the top 5 are increasing costs and enterprise data quality.  Of course, there is AI strategy, regulatory and political concerns, but cost control and data management are fundamental. 

Leaders are being tasked with balancing growth with cost cutting, putting increasing pressure on finance departments and a greater emphasis on data skills and digital transformation to achieve these goals.  As it relates to TEMs, you need more out of your TEM.  They can’t simply be an added cost and extension of your AP department – that doesn’t cut it, they have to deliver value.

So, before highlighting some of the expanding roles of TEMs, organizational alignment is fundamental in your success.  Who is interacting with your TEM?  Are you internally aligned, for example Finance, Business units, IT and procurement. Too often we see where the left hand isn’t talking to the right hand.  Sure, it sounds boring and basic, but it really drives efficiency and eliminates missteps. 

Tony: Theresa, what are you seeing in your work?

Theresa:

Cloud spend is growing and that comes with contracts and invoices that are incredibly complex.  Traditional TEM companies are expanding their offerings to include cloud expense management and new players in this space are emerging.  When looking for cloud cost management support, I suggest having suppliers do demos so you can see how their tools work.  You can also consider a trial where you give them 3 months of your invoices and let them load that data into their platform so you can see firsthand how the platform works.  Suggest having your incumbent demo their capabilities and also look to one of the specialist cloud expense management companies.  Matter of fact, I’m doing a session with CloudZero next week so I can see what their tool can do. 

Tony: How about you Frank, what do you see trending in this space?

Frank: 

Mobility continues to be hot but is evolving.  Machine- to-machine, Fixed wireless and device upgrade cycles are driving an added frontier for TEMs and corporations to manage.  Equipment provisioning is one of the areas that drives increased costs and the need for alignment.  Your TEM needs to be intimately familiar with promotions that are available from your wireless suppliers and the specific terms of those promotions.  Pricing will vary based on the selected term.  If the wrong term is selected, the intended promotional pricing never hits the invoice and you end up paying full list rates.  Also, keep a close eye on total equipment charges that appear on your invoices.

Other considerations on the mobility front include device features like insurance and cloud storage.  These added costs add up rapidly and may be unnecessary or even out of policy for your organization.  Who is responsible for that communication to your TEM?  Do you get monthly reporting that aligns to your policy and highlights key aspects.      

Tony: Theresa, what are you seeing that is new or on the horizon for TEMs?

Theresa:

TEMs really want to be involved in wireline provisioning—meaning that they want to manage this process end to end for you from quoting to order placement;  the expansion of this service creates entirely new contracting requirements  including MACD definitions pricing and related SLAs;  project/bulk MACDs;  requirements for TEMs to be involved with regular supplier meetings on status of orders;    what happens if they entirely miss a disconnect?  is the TEM 100% responsible for the cost of that service caused by their miss of the disconnect (which can be significant) or just the SLA penalty on their missing the disconnect order placement? 

Tony: Ok, Frank, let’s bring this back to basics…what are some foundational requirements for your TEM solution?

Frank: 

I highlighted this before in terms of organizational alignment, but don’t overlook some of the basics:

• Are payment terms properly reflected on your account?
• Do you have late payment fees – why? Is there a root cause being identified. 
• Do you have a SLA or SLO with your TEM on billing resolution? We’ve seen where misapplication of payment or duplicate payments drive credit balances or late fees.  This should be an item you review quarterly with your TEM. 

Additionally, are the reports you receive from your TEM meaningful – do they have the right information or do they need to be customized to highlight your focus or consider historic pain points.  Do you receive reporting that consolidates multiple billing platforms and actually enables you to understand your inventory?  Who is validating site addresses and services – how is that reported?

Tony: Any other uncommon items to be aware of?

Theresa: TEMS are not tax experts so if you have a complex environment such as being a tax-exempt entity, there are some things to be on the look-out for that a TEM likely will miss.  I have one tax-exempt client who had this experience—the TEM missed key state and local taxes on network services; the correction of this resulted in large credits from suppliers and significant go forward costs savings.

Frank: 

Yes, and along the lines of taxes, don’t lose sight of supplier-imposed surcharges and fees that vary greatly across suppliers.  At the end of the day these drive increased costs and need to be considered not only in RFP and negotiations, but reviewed and understood from your TEM reporting.    

Verizon Wireless’s Economic Adjustment Charge (or EAC) started at $2.20/device in 2022 and is now $3.97/device/month and there is no cap on how much this can increase.  These increases often times go un-noticed, as they are masked in billing as “other charges and credits”, and they rise year-over-year and should be part of your reporting as they can quickly become significant costs; to the tune of $100s of thousand per year.  Any new charges that your TEM sees on an invoice should be highlighted, as well.

Tony:  Theresa, what can an enterprise do to make some meaningful improvements with their TEM provider?

Theresa:  At TC2 we offer two key services for clients who use TEM services;  the 1st is a TEM Health Check review;  we come in and review your contract, the TEM portal, inventory and reporting and give you a read out as to how the TEM provider is performing.  The output from the TEM Health Check can be used to create a service improvement plan.  The second is what we call a “Contract Compliance and Optimization” review; which is basically auditing behind your TEM to see if they are missing anything.   In addition to potential cost savings from the CCO, we coordinate with your TEM to close gaps in their processes that enabled a missed error or savings opportunity.  Both of these projects will deliver cost savings to you and drive operational efficiencies.

 Thanks very much, Theresa and Frank.  Great discussion.  And if you would like to learn more about how to get the most value out of your TEM relationship, or if you’d like to discuss other ICT needs with Theresa, Frank, me, or any of our LB3 and TC2 colleagues, please give us a call or shoot us an email. You can also stay current by subscribing to Staying Connected, checking out our websites, and following us on LinkedIn.