3 Tips to know you and your team are on top of TEM

Telecoms Expense Management (TEM) has the potential to save – or lose – a lot of money for your company. It all depends on your team’s ability to manage your telecom environment efficiently and thoroughly.

In this series, we have already discussed the importance of maintaining good inventory records and invoice management. Now, it’s time to consider your team.

How do you know if your TEM team is on the top of their game? You can scrutinize their work by poring over databases and double-checking documents. You can surprise them with an audit, and bring in an expensive team to weed out the systemic inefficiencies on your behalf. Or you can challenge them with what we think are three simple questions, which will tell you in an instant whether your TEM department is running smoothly.

These are the three questions that every TEM professional should be prepared to answer at any given time, and they should tell you everything you need to know about the macro position of your TEM business. They are:

• QUESTION ONE: How many inventory items does your business have?
• QUESTION TWO: What is your annual spend across all products?
• QUESTION THREE: Which services are coming up for renewal and what is the total value?

There is no right or wrong answer to any of these questions, BUT it is vital that you are able to get quick, concise and accurate answers from the most senior members of your team. If your TEM team can’t answer any one of these three questions without delay e.g. “let me come back to you in a week”, then you know you have a problem. Keep in mind, if your TEM team can’t answer these questions, it’s generally not their fault and more likely as a result of not having the right tools in place to help them better manage their job.

What their answers tell you…

These three questions make up the three core principles of good TEM practice.

In a perfect world, your team will know exactly how many inventory items you have at any given time because they will be working with up-to-the-minute software that keeps track of every incoming and outgoing move, add change or disconnect (MACD). If they know their inventory within a 5–10% margin of error, that’s OK but it could be a lot better. And if they hesitate before answering, put you off for a few days, or give you a huge range of possibilities (e.g. between 30,000 and 40,000), there are clearly some major issues in your inventory system.

The same rules apply when it comes to annual spend.

Your TEM team should be able to run the numbers, or glance at a dashboard and tell you instantly how much money is earmarked for expenditure, where you are with your budget, and how your cost compare with this time last year, or last quarter, or last month benchmarked against the changes in network capacity. What you want to hear is a quick and exact figure – if it sounds like they are guessing, or rounding up or down, you’ve already heard enough.

However, it’s not necessarily helpful to blame the people for these discrepancies, because the only way you can ever manage these TEM issues is by having a comprehensive tool or system in place which allows you to manage your inventory and costings effectively and efficiently (Not to mention a switched on TEM provider that knows what their doing).

If you want to challenge your team further, ask them for a more detailed overview of their line items and expenditure. How many inventory items do they have under spend commitments? How much of it is coming up for renewal? How much of it can we send out for RFP to drive savings?

By drilling down into the nitty-gritty of your TEM transactions, you will reveal every single strength and weakness in your team, and only then can you start implementing cost-saving changes.

The good news is that if your TEM team can’t answer these questions, then there must a potential cost-saving area in your business. Either your team is extremely busy and just doesn’t have the time to stay on top of their multiple excel sheets , or more likely your business needs to update your approach to Telecoms Expense Management.

If they answer every single question with flying colours? Great! You’re ready for an audit!

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