TEM Cost Justification ROI: Beware of Cookie Cutter Approaches

Avoid mistakes when developing a cost justification ROI for TEM.

Last week’s blog highlighted cost savings areas for TEM programs. Often companies will use this information to create a spreadsheet model to cost justify a TEM program. There is nothing wrong with taking the savings categories and using them in a spreadsheet. Last week we identified three main categories: reductions in spending on telecom services, labor efficiencies, and indirect savings

The mistakes arise when evaluation teams attempt to pit different suppliers against each other with the spreadsheet. Unless, the assumptions change, the winner will always be the solutions provider that offered the lowest price. This is a mistake because all TEM solutions providers are not the same. Inevitably, some will do a better job at securing refunds, providing a complete inventory of services, AP processes, optimizing savings and driving down spending on telecom expenses.

How do you determine which provider will drive the most savings? Look at the personnel that perform this work, the systems that they use and past performance. Providers that have a strong record of success know where to look for savings. They can quickly identify unused circuits and services, expired agreements, and benchmarks for contracts. Theywill have the tools to identify opportunities to reduce expenses with minimal effort of the client. No one wants the effort of re-provisioning their entire network or disruptions from switching providers for elusive savings.

Also consider the solutions providers past experience resolving large billing claims. Successful providers draw on past precedents and relationships with carriers to resolve complex issues. Those relationships enable a provider to follow the correct procedures and diplomatically escalate your claim with the right person at a carrier who has the authority to issue a refund.

Financial stability also matters. A company that is not financially secure may be too eager to settle claims without working to secure the largest possible refund. Carriers will deny claims and offer low settlements so perseverance and willingness to pursue claims really matter.

When you develop a cost justification for TEM, be sure to consider the solutions provider’s capabilities and past track record and include different valuations for your savings estimates. BACK