Author: Kevin Donoghue, CEO - Telesoft
A new Forrester report commissioned by Verizon revealed findings showing that enterprises are planning to grow and transform their business through a combination of new communication technologies and growth of existing telecom services. However, the report also identifies cost cutting as a top priority for enterprises. Given the conflicting nature of these trends, telecom managers need to understand how to manage expectations appropriately.
First, the top priorities call for growing revenue (84%) and improving productivity (77%). These plans for growth point to increased spending. For example, 65% of respondents plan to expand enterprise mobility services to meet their business priorities. In addition, 88% of respondents have already invested in their network as part of their digital strategy, or plan to do so.
On the other side, reducing costs was selected by 74% of the respondents as a top priority. This is where telecom managers need to consider how they will balance conflicting priorities. Consumption of network services and spending is likely to grow as part of digital transformation cited in the report. Employees, partners, and customers will increase their consumption of network bandwidth to create new ecosystems, enable new products and improve communication. Also, with the Internet of Things (IoT), thousands, if not millions of new connected devices will be added to the network.
Telecom managers will be faced with the demand to find ways to reduce the costs of running the network; targets include personnel costs, management cost, and other overhead costs. This requires a fundamental transformation, with consolidation of expenses into one system that streamlines management of network assets, invoice processing, expenses and optimization.
A TEM program can do this and will also help telecom managers reconcile the inherent conflict that arises between growing additional telecom services and the demand to reduce costs. Telecom managers should work to demonstrate how they now have more capacity (often two or three times what it was a few years earlier) for the same cost as before.
Telecom managers need to position themselves with Telecom Expense Management (TEM) automation and reporting to show they are prudently managing costs. They need to answer these questions:
- Is the enterprise paying the correct rates?
- Is it using everything that it is paying for?
- Is the technology appropriate?
- Is there something more cost effective or better?