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How CFOs Can Plug Telecom Spend Leakages

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How CFOs Can Plug Telecom Spend Leakages

by Peter Hum, StrateValue, 13 October 2011
topics:
Business Expense Management
tags:
mobile expense management telecom expense management

Telecommunications has become the operational backbone for any large organisation in Asia to succeed. Over the last many years, IDD tariffs have dropped significantly and Internet access has become a necessity.

 
More and more business applications are now IP-based and are putting large demands on network bandwidth. Most of all, the explosive growth of smart mobility devices in corporate Asia has meant that IT managers must now find ways to more effectively manage this untethered communications network. 
 
What does all this mean for the CFO? 
 
From finance’s perspective, it means that telecommunications expenditures are rising at an alarming rate year on year. Take mobility as an example. According to a recent study by US wireless network operator iPass, 42% of global enterprises surveyed believe that mobility costs would likely outpace inflation, with an increase of at least 5%, in the coming year while 30% believe costs would increase by more than 10%. 
 
This is not surprising since companies are quickly adopting smart mobility devices as a way to improve worker productivity and empowerment in the field through their messaging and application capabilities. As a result of these initiatives, enterprises are quickly finding out that increased productivity and empowerment comes at a significant cost.     
 
Finance challenges
For the CFO, several factors make telecom expenditures particularly challenging to manage:
 
  • Sheer volume of monthly telecom bills. A recent project engagement by StrateValue with one of the largest banks in Malaysia garnered roughly 25,000 pages of invoices on a monthly basis from the company’s voice expenditures alone.
 
  • Technical nature of the telecom industry. Business managers do not always have the right knowledge to scrutinise and monitor telecom expenditures
 
  • Constant flux in telecom expenditures. Trying to track all the changes that go on within the organisation or tracking the changes in products and services from each telecom service providers is a constant struggle
 
  • Sparse details in telecom expenditure reporting. This is typically done at the summary level and does not give business managers the ability to drill down to scrutinise the line details
 
A more holistic and practical way to manage these expenditures is clearly needed in order to fully manage and control this runaway expenditure.
 
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