Telecom Expense Management (TEM) is not a broadly known concept. In most businesses, telecom services are not well controlled and tracked, which hurts their bottom line. Corporations are becoming more aware of the need to control telecom costs. TEM, which includes call accounting and bill tracking, is the tool for successfully controlling these expenses. Some areas where telecom costs can be reduced are:

* Carrier billing errors

* Charges for discontinued resources

* Inefficient use of inventory

* Contract terms negotiation

* Limiting telecom abuse and fraud

Substantial savings can be realized. According to a Gartner report 12 to 20 percent of corporate telecom charges are in error, 85 percent of which are in the carrier's favor. Thus it is apparent that companies that do not use telecom expense management are wasting money.

Some carriers are now beginning to offer TEM services for customers, but does that make sense? Would you put the fox in charge of guarding your chickens?

A far better solution is to deal with a reputable independent TEM provider to either purchase the software or to outsource with them. Both approaches have merit. While owning the system provides greater control, outsourcing has some distinct advantages, not the least of which is the availability of the provider's expertise. Many companies that want to acquire a TEM solution choose to outsource, rather than purchase the system outright. Some of the benefits of outsourcing are:

* No large capital outlay

* Managing telecom expenses is less time consuming

* Frees up personnel resources

* Invoices are processed by the provider's expert staff

* Big savings with little effort

* No worries about software maintenance and upgrades

* Concentrate on the big picture without worrying about the details

A large financial institution recently decided to go that way. Up until then they struggled to control their telecom expenses. Two employees were charged with processing thousands of telecom invoices in addition to providing resources for thousands of employees.

With a lack of free time to check for billing errors, they had to be content with the occasional spot checks to see if this month's charges are more or less in line with last month's. While any system is better than none, this did not make for great accuracy. Now billing errors are caught by the new outsourced TEM system.

With the aid of the TEM provider, the financial institution saved over 10 percent, or about $600,000 a year, after renegotiating contracts with the carrier. This being only a fraction of their total savings, it can be seen that TEM
can provide amazing returns on investment (ROI).