IT spending drives innovation, but it’s all too easy for technology expenses to spiral out of control and eclipse the value businesses hope to gain from their new investments. Executives are shouting “Show me the money!” But in reality, companies aren’t gaining – they’re losing. On average, companies report capturing only 31% of the full revenue benefits and 25% of the expected cost savings from their digital transformation plans.
There needs to be a better way to fuel innovation without triggering technical debt, and that’s where Technology Expense Management comes into play. This blog will walk you through what managing your technology service expenses means and how to embrace IT cost optimization strategies and solutions effectively within your organization.
What is Technology Expense Management?
Technology Expense Management is the process of managing cloud, mobile, and telecom expenses and services. When done right, companies can clarify their technology costs and save as much as 40% across the entire tech stack while better utilizing resources and driving process efficiencies in financial management.
Technology Expense Management software and services offer IT, finance, and procurement teams a centralized platform to track, monitor, and optimize costs and service usage for cloud, telecom, and mobile technologies:
- Deep visibility into costs and any wasted technology services, resources, or assets.
- Recommended ways to save money or better utilize purchased services.
- Automated systems and processes to speed financial management and governance practices.
Ready to get started? Here’s a step-by-step manual for activating technology expense management within your company.
Step 1: Regain Control over Complicated Cloud Costs
Digital transformation and the cloud are synonymous, but companies are overspending, underutilizing, and in the dark on unsanctioned apps and cloud infrastructure. FinOps has become the go-to methodology for solving these cloud cost realities, and cloud expense management (as part of a comprehensive technology expense management solution) enables companies to operationalize FinOps in one platform for SaaS, IaaS, and UCaaS.
Overall, companies stand to save as much as 40% in cloud costs. This figure is significantly higher compared to mobile and telecom savings, which is why it’s recommended that you start your technology expense management journey with cloud services.
SaaS Management
Redundant apps, unused and underutilized licenses, and Shadow IT are the big ones here. Did you know that most IT leaders believe they have less than 50 apps when that number can easily reach well into the hundreds? Without proper oversight, SaaS can lead to major security risks, waste, and overspending.
UCaaS Management
Let’s not forget the proliferation of communication and collaboration apps over the last few years. How many of those apps are now redundant, and how much could you save by consolidating them? Managing unified communications as a service is also a key starting place.
IaaS Management
It’s easier than ever to start using public cloud services from well-recognized providers, but without a way to effectively track, analyze, and optimize spending end-to-end you won’t be able to see how your money is flowing or optimize your multi-cloud service (for example, comparing existing configurations against the most cost-effective configurations or knowing when to use service pausing features and commitment discount opportunities).
See how Tangoe helped a global manufacturer save $668,000 in total annual technology costs – $300,000 of those savings coming from long-term commitment discounts that were applied to cloud infrastructure services and credits from service providers.
Once you’ve clarified your cloud costs, it’s time to move onto your mobile landscape.
Step 2: Simplify Mobile Management to Maximize Productivity and ROI
A study recently conducted by Tangoe found that 100% (yes, all) of companies are struggling with mobility management, from sourcing new assets and managing inventory to help desk support and logistics. From abandoned apps and devices to security holes to invoice/contract complexities, there are countless ways mobility can drain IT budgets.
Mobile spend management (as part of a comprehensive technology expense management solution) is proven to help save 15-30% in mobile costs while strengthening mobile security, regardless of your approach to device ownership (Bring Your Own Device (BYOD), Device-as-a-Service (DaaS), corporate-owned).
Mobile spend management takes a three-pronged approach for controlling mobile costs:
- device expense management (optimizing the cost you spend on your mobile devices),
- device lifecycle management (managing devices at every stage of their life), and
- mobile device management (administering security policies and other specific management tasks for your mobile fleet to strengthen your IT security posture).
See how a Fortune 500 insurance company saved more than $500,000 in its first year with Tangoe’s Managed Mobility Services and Advisory Services, being able to cancel two full-time contractors and focus on large-scale projects versus the nitty gritty of mobile device management.
Ready to move onto step 3? It’s time to assess your telecom services.
Step 3: Tighten Up Telecom Services to Drive Savings and Efficiencies
The pressure is on for companies to adopt SD-WAN for cost savings achievements but also phase out their POTS lines or “Plain Old Telephone Services.” Companies can save a lot by doing so, but not every business is ready to take the leap. Telecom expense management (as part of a comprehensive technology expense management platform) can help simplify, optimize, and manage your existing telecom services, minimizing their cost impact while keeping your organization running efficiently.
On average, companies stand to save 10-15% in telecom costs by:
- Taking stock of inventory: Gain visibility into what you have, where circuits are located, who’s using them, and how much it’s costing you.
- Auditing bills: Keep a close eye on bills to ensure you only pay for what you want and use.
- Eliminating circuits: Rid yourself of circuits and services that are no longer needed, have limited usage, or can be switched to a more cost-effective broadband or public internet alternative.
- Automating invoice management: Get standardized, automated, end-to-end management of all your telecom invoices, from initial receipt through loading, cost center allocation, Accounts Payable/General Ledger (AP/GL) reporting, and payment remittance to vendors.
See how Tangoe helped one automotive retailer reduce their telecom costs by 66%, streamlining order management and creating 50 hours in weekly productivity savings.
Ready to Start Saving?
As a global leader in technology expense management, Tangoe helps companies across the gamut simplify, manage, and optimize technology expenses and assets so they can focus on doing what they do best – driving $340M in annual cumulative savings.
Learn more about how you can start saving with our industry-leading technology expense management solution, Tangoe One.