Why we love this article: TEM vs Audit and the debate we don’t need to be having
A recent blog post by the Profit Advisory Group (PAF) really struck a chord with us. The piece – ‘TEM Software vs an Audit: Evaluating ROI’ – took an honest and industry-savvy approach to that eternal question – should I implement TEM software or schedule regular audits?
Of course, the answer is – do both! The TEM vs Audit debate is a waste of time and mistakenly places two very different systems on a par when in fact they offer complementary, not competitive, services.
We have seen so many auditors making a killing by using this faux debate to convince companies that there is a choice to be made between TEM and audit. They visit the company every 2-3 years, scour the records, make their recommendations and leave them to it for another few years when the whole process starts up again. Yes, these audits will more often than not end up saving the company money, and yes, they are reassuringly thorough, but TEM offers a streamlined and integrated solution that negates the need for these regular check-ups and helps you to keep an eye on your systems and save money on an on-going basis.
Both TEM and audits can clearly add value to any business, but in different ways. We strongly believe that there is no choice to be made here, and that both TEM services and auditing services will suffer if they are used in isolation. And that’s why we love this article, and why we agree wholeheartedly with its core message that “audits and TEM are complementary and not competitive”.
The downsides of choosing audit only
It doesn’t matter how well organised or how professional your auditor is – any audit is going to cause a disruption to your business. Businesses change over time – they contract and expand, executives come and go, and processes are updated or removed.
If your auditor is coming in just once every 2-3 years, there is no guarantee that you will be using the same accounting systems, suppliers, or telecom bundles that you were using the last time they visited. And when you are relying on your audits to act in lieu of a TEM system, you better make sure those audits are thorough.
This means spending valuable company time digging up old records, bringing the auditors up to speed on any changes and setting up new log-in details on your internal systems.
In the aftermath of your audit, there will be an understandable rush to implement any of the auditor’s suggestions and let the money-saving begin! However, even one small error at this stage can snowball over time and when your auditor returns in a few years’ time, you may find yourself struggling to untangle some new complication or systemic issue.
The only way to avoid playing this game of catch up is to keep on top of your accounts with a bespoke system such as TEM.
The downsides of choosing TEM only
The PAF article says: “TEM manages invoices but doesn’t really provide deeper understanding of your overall telecom services. Audits provide great understanding, but do not manage future spend. Audits will also identify future savings whereas TEM is more focused on identifying billing mistakes.”
This is a great definition of the difference between TEM and audit, and really demonstrates the need to use both systems in conjunction with each other.
An internal TEM system is an investment – once it has been installed, it can be updated and streamlined for many years to come. However, the initial set up can be quite disruptive and costly, so if you’re a small businesses or start-ups its important that you think through implementing a TEM solution early on to ensure things are setup properly from the beginning. This ensures that as you grow, or change over time you’re not faced with a huge mess to sort out and pull together come acquisition time.
Unlike a scheduled audit, the longer you use your TEM software, the more valuable it becomes to your company. TEM software allows your company to manage work flows designed around your business, track every invoice, and every payment, making it easier for you to gauge efficiency and save money on an on-going basis. This information can be archived and referred to at any point, helping you to identify any trends or inefficient spending.
However, before you start reaping the benefits of TEM software you need to have reliable, accurate and properly audited information. “Bad information in equals bad information out,” as the article says, so if there is any discrepancy with your original data, you will end up creating more work for your company over time by making constant corrections.
The only way to be sure that you are starting off with clean, reliable data is by scheduling an audit before implementing a new TEM system. Our advice would be to watch out for TEM providers that load supplier invoices only to build up your environment and then walk away saying “you’re inventory matches the invoice.” Well, of course it does Sherlock, because that’s how it was created!
Changing the conversation: TEM + Audit
We think it is pretty obvious that the TEM vs Audit debate should be relegated to the past, and replaced instead with a conversation about how to best integrate TEM + Audit.
Every company wants the same thing – to improve efficiency and to save money. Telecoms consultants should be focused on adding value to these businesses, not perpetuating outdated systems.
Clearly what is best for the company is to audit first, then install a robust TEM system and make costly and disruptive audits a thing of the past.
How to best manage the audit-to-TEM transition? That’s the sort of question we should be asking.
Don’t miss our post on telecoms cost transparency “Five ways Telecoms cost transparency aids your business”