Telecom Expense Management

Telecom Expense Management Global Market Outlook

• The global telecom expense management market is estimated at $3.8 Billion in 2023. It is expected to grow at a CAGR of over 10 percent to cross $5.7 Billion in 2027

• The US market, which accounts for more than 42 percent of the global market, was estimated at $1.43 billion in 2022.

• The price of TEM services is based on the number of devices to be monitored, number of invoices, and the client’s annual telecom spend.

• Currently, for mobile telecom services, a trend towards per device pricing is prevalent in the supply market, where the prices typically range from $0.75 to $2.50 per device. With the other model, where the enterprises pay the fee as a percentage of their annual telecom spend, it varies from 0.35 to 2 percent. Ideally, it should be below 0.7 percent

Telecom Expense Management: Benefits and Challenges

Benefits

Visibility:

• Scheduled reporting and integration with data analysis tools provides visibility, as well as the capability to identify savings, optimization opportunities, and areas for strategic sourcing

Data to make Informed Decisions:

• On-demand information for a holistic picture of an enterprise telecommunication liability will empower the enterprise to make informed decisions

Cost Savings:

• By proactively capturing, disputing, and eliminating incorrect invoice charges, and highlighting billing anomalies can help reduce abuse and enable organizations to drive down communications costs

Growth of Cloud Services:

• As the software licenses and related purchases are intangible in nature, allocating their costs to specific departments and users is more challenging compared to traditional hardware assets. In a cloud environment, cost allocation, analysis and optimization can be done by leveraging a TEM software

Challenges

Accommodating Local Rules and Regulations:

• While multinationals implementing TEM solutions, the local rules and regulations play a crucial role. Each geography may have a different requirements, in terms of how personal data must be handled

Managing Multiple Service Providers:

• Multinationals are dealing with many different service providers across the globe, each with unique billing formats, contract terms, and way of doing business and managing these relationships can become a challenge for the enterprise

Lack of Internal Resources or Expertise:

• Any TEM implementation must have the people and resources behind it to succeed. If a company does not have the right internal resources to manage the international telecom expenses, it will affect the process. Another main challenge is the change management associated with the implementation

Telecom Expense Management: Cost Reduction Opportunities

• In case of telecom services, cost savings can be achieved through deploying Telecom Expense Management(TEM) solutions.

• An estimated cost reduction ranging from 19 percent to 54 percent can be achieved through various aspects of Communications Lifecycle Management.

• Though the cost savings vary from vendor to vendor, on an average, implementation of TEM can reduce the overall annual telecom spend by approximately 23–26 percent.