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How to Accurately Forecast Your Telecom Expenses

Posted on: November 15, 2018

Telecommunications are mission-critical. What business can survive without telephone access or reliable network connectivity?

I recently lost Internet connectivity at home for over 24 hours! By the end of my communicare interruptus ordeal, I had moved from sheer panic to anger to emotionally shutting down—just because I could not reach the outside world (I’ll share more about that day in a future blog). Given the life-altering natural disasters people are experiencing currently, losing Internet connectivity is trivial in comparison. Yet, being disconnected from the outside world—my family, friends, co-workers, and customers—caused a major disruption. Considering the necessity of telecommunications, it’s no wonder that globally, telecom spend accounts for 15% of IT spend (approximately $3,526 billion).  This is a significant investment.

Given the scope and importance of telecommunications, it’s worth investing the time and effort necessary to properly forecast future telecom expenses. Yet, so many of us struggle with this critical task. According to recent findings from IDC, forecasting future telecom expenses is the biggest pain point of Telecom Expense Management. Read on to identify some common obstacles associated with accurately forecasting telecom expenses, as well as ways to overcome them.

Why Do Businesses Need to Forecast their Telecom Expenses?

Forecasting is critical since organizations must ensure that planned expenses are in-line with revenue and profit projections. If market conditions indicate a dip in revenue, it hardly makes sense to plan for an IT infrastructure refresh project during that period of reduced revenue.

Additionally, telecom expense forecasting ensures your organization is investing in technologies that align with corporate initiatives. For instance, if an enterprise decides to increase the number of employees eligible to work from home, then it makes sense to reduce the number of phone lines in the office, while also modifying mobile phone plans. Another example is an organization’s decision to increase its use of Infrastructure-as-a-Service (IaaS). In this case, businesses should stop investing in maintaining home-grown servers at the historical rate.

Regardless of the specifics, once an organization establishes a process for generating telecom forecasts, the data can be used to improve organizational decision-making.

Why is Forecasting Telecom Expenses Yourself Difficult?

Why do so many organizations struggle with forecasting future technology expenses? The number one difficulty is lack of visibility to current usage and spend of technology assets. There are a few reasons for this problem:

  • Different departments and lines of business make purchases and investments without internal visibility. You find out about a purchase long after the fact, and sometimes, you only become aware of this expense when an overdue invoice makes its way to your desk.
  • With the growth of Software-as-a-Service (SaaS), you may never even see an invoice since these departments pay for the service with a credit card and expense the charges. By the time you become aware of this service, this small monthly expense has ballooned to significant proportions. —shadow IT rears its ugly head.
  • Finally, although many enterprises have implemented a Telecom Expense Management (TEM) solution, the result may not fully support the needs of the business. Ask yourself some simple questions: Can your TEM solution capture all existing technology spend, categorize them properly and allocate costs to the appropriate departments, while streamlining your processes? Does your provider have the capability to fully audit and identify those services and expenses that impact the business? Lastly, can your provider help you determine whether your costs are in-line with industry standards?

There’s a Solution: Leverage a TEM Provider

There are four primary ways in which leveraging a trusted technology expense management provider will help you accurately forecast your telecom expenses:

  1. Access to Advisory Services: Experienced technology expense management providers like Tangoe offer the benefit of an advisory service. These services help you conduct a thorough audit of your organization’s technology landscape. An audit will help you ferret out those assets in which you don’t have visibility, and it is also a powerful way to combat Shadow IT.
  2. Access to a Contract Negotiation Ally: A experienced advisor will also ask about your organizations overall direction and help you ensure that you consider future technology initiatives from all departments as you negotiate with your vendors. This ensures you build in the necessary allowances upfront to avoid unhappy surprises.
  3. Access to Industry Benchmarks: Your TEM solutions provider can provide industry benchmarks for different aspects of technology expense—whether mobile, cloud or fixed contracts. This is an invaluable resource. Are you overspending or under-investing compared to organizations of a similar size and industry? These are important questions to help you understand how your company stacks up, and once you know how you compare, you have the data needed to adjust your company’s plans.
  4. Access to Powerful Reporting & Analytics: Robust reporting and in-depth analytics are a key requirement for any TEM solution you implement. With the right TEM solution in place, you have access to vast amounts of data about usage and spend. Your TEM platform should have the ability to auto-discover assets, so you have visibility to all technology assets in your organization. Your TEM application’s reporting and analysis will help you identify trends in your business. Is mobile data usage growing or is it steady? What about network bandwidth? Are employees using landlines at the same rate as in the past or are they switching to VoIP or mobile devices? What are your cloud service expenses? Are your cloud expenses growing? By reviewing these trends, you will discover the changing habits within your organization that indicate what services show growth and which services are contracting. Your now on your way to better forecasting.

Some Closing Thoughts

All organizations know that forecasting future telecom expenses is critically important, yet it’s often very difficult to do so accurately. However, with the business intelligence you gain from a TEM provider’s expertise, you can better equip your business to generate more accurate forecasts of usage and spend. The key is to partner with a TEM provider with industry expertise who also understands your business. With this partnership, you’re well on your way to tackling this tough topic.

Contact Tangoe today to get the visibility and expertise you need to help you plan your future telecom expenses.

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$40+
Billion

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10+
Million

devices managed
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