3 Reasons Not to Do IT Cost Management In-House 

DIY vs ROI -2

Here at Tangoe we see a lot of companies trying to manage their cloud spending, network and telecom expenses in-house. While most organizations can identify savings, acting on them is different story. IT and finance teams are notoriously overstretched, meaning they simply can’t get to the most critical work that turns insights into real dollars saved — operationalizing cloud spend management.  

In fact, data shows as much as 52% of identified cost savings never get actionized. They are unexploited opportunities. That’s like cutting your ROI in half. Forrester’s FinOps analyst Tracy Woo, warns IT and finance leaders that a proper cloud cost optimization program typically starts with three full-time employees. 

This helps explain why we caution clients against a Do-It-Yourself approach. Beyond just the staffing challenges, IT and finance executives face three key logistical challenges that can be difficult to overcome with a DIY approach to cost optimization. Here’s what you need to know. 

IT Financial Cost Analysis: Don’t Go at it Alone 

  1. When Savings is the Goal, Default Dashboards Don’t Help 

The core issue is the one-sided financial relationship between IT service providers and clients. Providers have little motivation to help clients cut their costs by right sizing their services and using their resources more efficiently. So, it’s no surprise that default dashboards from service providers don’t deliver the cost optimization insights companies need to save money. Providers aren’t incentivized to improve their service usage reports, helping clients better balance this one-sided relationship. 

That puts the burden on the client to take their raw service usage data and either manually evaluate it or try to apply advanced analytics to reveal their potential cost savings. The data is all there and readily available, but the work of turning mountains of data into savings insights can be a heavy lift for teams, particularly those inexperienced in building AI engines with many integrations.  

The bottom line: Why DIY when ITEM providers have already built the AI engine for you, connecting it to the tools you already use to do business?  

Tangoe’s AI-powered platform seamlessly integrates with hundreds of providers globally to deliver the reporting and insights needed by enterprises of all sizes and scales. Integration is how we know our clients’ IT expenses and devices are always in a known state. Plus, any home-grown ITEM solution frontloaded with industry-average spending data and pricing information is considered outdated tomorrow without sophisticated integration to keep pace with the dynamic nature of corporate purchases and service pricing. 

Tangoe’s platform is in-sync with your services, pulling updates in real time to understand the current status of assets as well as the spending and contracts associated with them. We have five different methods for collecting vast IT expense information with integration into 500 SaaS applications and 5,000 APIs for more automated dataflows. We also recently won a gold Stevie award for cutting our solution implementation times in half.   

  1. Automated Processes means Faster Time-to-Savings 

When it comes to optimizing costs, speed is everything. Every day and week that it takes to make a correction to your service or invoice represents a lost opportunity in saving money on your IT services. The faster you can cut costs, the more money you gain in annualized savings. What drives speed? Robotic process automation is the secret to capitalizing on identified savings more rapidly. 

Few companies have automated their IT cost control measures, invoice administration, and contract management in ways that surface clear cost savings recommendations and hasten response. Meanwhile, ITEM providers like Tangoe have invested millions in automation. We have 65+ patented ways to speed data capture, verification, and information processing, and we automate reporting capabilities to flag common types of overspending.  

See how an international gas company eliminated manual invoice processing. Even Tangoe used its own cloud cost management tool to reduce through attrition one IT financial analyst position.  

Automation helps Tangoe clients: 

  • Capture, load, and process 370,000 invoices each month 
  • Build inventory records for over 750,000 fixed network circuits every year  
  • Automatically modify telecom and cloud infrastructure services once a cost-saving recommendation has been approved 

  Learn the three ways Tangoe automates IT asset and cost inventory processes 

  1. Expertise Eases Burdens and Moves Companies Past Cost-Cutting Basics   

There’s just no substitute for experience, and expertise is particularly helpful in maximizing ROI on technology investments. Experts are great for advanced techniques that go beyond basic cost comparisons. Tangoe’s Advisory Services uses trends in how your company makes phone calls to make smarter cost-cutting recommendations, comparing telecom and mobile plans based on the individual features that are most important to your company.  

A cost management professional won’t simply shop around looking at total prices; they look at the price-per-feature and triangulate your service usage data and your highest-priced services with the latest market-competitive price index. This allows for a more comprehensive evaluation and a more intelligent decision-making process. 

Better still, a team of experts will bring in negotiation artists to handle RFPs and help you get the best price and the best terms when it’s time to renew your service contract. They use their professional experience to go deep into cost-cutting measures with intelligence contextualized by overseeing billions of dollars in IT investments. For example, Tangoe oversees $34B in IT spending and publishes our IT spending trends and insights in an annual report

Plus, fully managed ITEM services mean clients get the advantage of professionals handling the administrative work of the asset inventory – the systematic cataloging of all IT services, devices, and expenses. They help with data entry, updates, and maintenance across the lifecycle of your services – whether it’s ordering new network circuits, making changes to existing services, or closing out old contracts.  

ITEM platforms contain many standard templates and processes that can be configured to meet a wide range of use cases. Expense management professionals know how to customize workflows, catalogs, and reports helping companies align default software with their unique business needs, and with Tangoe, professional services are available on a one-time basis and on ongoingly. 

IT Cost Savings Remain Elusive without Operationalizing Them 

At the end of the day, operationalizing a corporate cost management program is the key to success. Outsourcing ITEM can result in better business outcomes, because overall it’s faster and easier to: 

  • Implement technology and gather detailed IT and financial information 
  • Establish an accurate inventory of all services and their costs 
  • Configure default templates, shaping the software around your business needs 
  • Gain insights and recommendations for reducing spending and IT waste 
  • Take action on identified savings, using closed-loop automation, integration, and accelerated workflows to modify services quickly or dispute invoices 
  • Accelerate the time to ROI on cloud, mobile, and telecom investments 

Don’t let DIY jeopardize the ROI of your cost management program. 

Read the next article in this series: IT Cost Management: Don’t Let DIY Kill Your ROI   

Talk to an IT cost management consultant today