Telecom Expense Management: How to Unpack ROI and Calculate Savings

This is the first article in a series that teaches you how to use industry-standard calculations to assess the value of IT expense management solutions from Tangoe. Use this guide to estimate your potential savings and ROI. Don’t miss the other articles on mobile savings and cloud savings 

These days every CIO is trying to make way for more innovation – 83% of CIOs state that they’re worried about insufficient funds to properly invest in digital transformation. That means they’re digging into the numbers to scrutinize where the dollars and cents are going and where their technology portfolio might need trimming. Telecom expense management solutions play an increasingly important role in using waste to fund new advancements. But how do you estimate how much time and money you could save?  

That’s where Tangoe’s value equation guide offers a guiding light. 

Unpacking the ROI of Telecom Expense Management Solutions 

CFOs and CIOs can define financial returns by performing some broad evaluations. Long before a meticulous audit of all telecom assets is performed, business leaders should take a rough stock of their portfolio, processes, and spending trends. Once these are identified, it’s easy to apply standard principles to help:  

  • Define the direct and indirect costs of your current approach to expense management 
  • Estimate the scope of your IT waste to see how much you could save 
  • Calculate the benefits of an investment in Tangoe’s services 

Value Equations: Size Up Your Savings with Simple Calculations 

Managing billions of dollars in IT spending for enterprises of all shapes and sizes quickly teaches you how to estimate the size of a company’s IT waste. Such is the case with Tangoe, which manages $15B in IT spending and has a team of 60+ consultants guiding companies through hundreds of cost-optimization projects every year.  

In monitoring and tracking client data, we have defined ways to calculate the average savings companies can garner by advancing their IT financial management practices  with the help of an IT expense management solution. Herein, you’ll find our savings calculations compiled into a series of industry standards categorized across three technology arenas: telecom, mobile, and cloud. In this first article, we explore the telecom arena. You can also jump ahead to mobile savings

Telecom Services: How to Estimate Your Savings Potential 

With some simple math and this telecom savings guide, you can use the insights below to calculate your own potential savings. Need more help? Tangoe offers customized evaluations and ROI reports too. Request one here. 

Invoice Processing Times: Gain Financial Productivity 

IT invoices require time and effort to manage. Key steps include capturing and tracking data from a slew of providers, overseeing approval processes, issuing payments, and allocating costs back to various business units in the form of chargebacks.  

Tangoe’s experience shows that the average telecom invoice processing time is 18.5 minutes per invoice. Whereas automated IT expense management systems (like Tangoe’s) can process invoices in 8 seconds and fully automate cost allocations. How long does it take your organization to manage telecom invoices?

Reporting & Analytics: Accelerate Financial Processes 

Reports that summarize expenses are at the heart of every IT financial management program. Teams need advanced algorithms with automated data visualizations and custom cuts of data to satisfy every stakeholder and department. 

Working with thousands of enterprises Tangoe has learned that, on average, companies spend 4-6 hours per month per report compiling the right information in the right ways. That’s in sharp contrast to Tangoe’s platform, which can generate reports in seconds. How many hours of productivity could you gain by automating telecom financial reporting? What would you do with that time savings? 

Invoice Auditing: Generate 5-10% Cost Savings 

Best practices in IT financial management address more than just invoices and reports. Financial analysis should uncover instances of non-compliance – discovering billing errors, detecting anomalies, and finding instances where service level agreements have not been met or credits are due. This work requires reconciling invoices against service usage and contractual obligations to validate legitimate expenses and ensure payments are made only for the services clients use and agree to. Tangoe can do this for you, offering it as part of our telecom expense management services

Tangoe’s experience in working with thousands of enterprises has demonstrated that on average companies can save roughly 5-10% of their total annual telecom spending by auditing and reconciling their invoices. (It should be noted, however, that this one-time savings decreases to roughly 2% in subsequent years.) How much do you spend annually on telecom services? How would you like to save 10% of your total spend? What dollar value would this deliver to your business?  

Avoiding Late Fees: Enhance Business Continuity and Save Money  

Studies show financial mismanagement and late payments result in 85% of companies experiencing IT service outages, which can impact employee productivity, business transactions, and the bottom line. Late payment fees can be costly and avoided. 

On average, companies waste .25% of their total telecom annual spend on late fees which can be eliminated through disciplined financial management. What could you achieve if you reallocated 17% of your total spend to new technology investments?  

Stretch Your Telecom Budget  

Tracking and analyzing how efficiently telecom resources and services are being used within an organization is a key element of IT financial management. But maximizing service utilization requires detailed usage data and advanced analytics for the deepest insights into opportunities for optimization.  

Additionally, contract rate reviews can also offer significant savings, helping companies compare their current rate (or a new proposed rate) against the most aggressive pricing from top providers in the industry. Making these comparisons requires up-to-date market pricing intelligence. Do you have what it takes? See how one company knew their renewal offer wasn’t competitive. Tangoe’s Advisory Services team offers a rates and savings analysis service as well as contract negotiation services.  

Get a Personalized ROI Analysis 

Want a customized ROI evaluation for your business? Tangoe offers free consultations that dive deep into your financial management health across both telecom and mobile technologies. You’ll walk away with action items for making tangible improvements and a customized ROI report showing you the value of an investment in Tangoe’s software and services. Email us at [email protected]. 

Ready to assess your ROI in other arenas? Don’t miss the other articles on mobile savings and cloud savings — Coming Soon!