Telecom & Mobility Management

CASSINFO.COMGUIDEBOOK

A Buyer’s Guide to Long-Term Success

Using the 5Cs to Evaluate

Can you fi nd the diamond in the rough ...

Or, Are All TEM Vendors Alike?Most IT leaders don’t think about their TEM provider– un l they realize the contract is coming to term. Studies show that most large enterprises are on their third TEM provider. In fact, Eric Goodness, vice president, Gartner noted that “Gartner is witnessing a huge wave of large companies that are dissa sfi ed with their TEM providers and the migra on of these big logo brands is just beginning.” So odds are that you’re thinking about a change. This me around, how do you pick a be er alterna ve? Are all TEMs really alike?

Ask any newly engaged woman if all diamonds are the same. Uh, no.

Most of us don’t really know how to buy diamonds, so the jewelry industry came up with a rubric to help us–the 4Cs: Color, Cut, Clarity and Carat Weight. If you want to make a be er telecom & mobility management choice this me around, we suggest you focus on the 5Cs of TEM buying: Capital, Change, Cost, Cycle

Services and Coolness. When you use these 5Cs, you will recognize the diff erences between TEM providers–especially the full-service providers versus the TEM so ware companies.

We don’t blame you, by the way, if the dis nc on between “TEM so ware” and “full-service” has you vexed. As Goodness noted in the same blog post, “Most TEM companies struggle to understand if they are a So ware company or a Services company or a Business Process Outsourcing company.” So even the providers appear confused about so ware vs. service.

On this point, Cass agrees with Gartner. Most TEM providers are struggling because they were born as so ware companies and years later, they’re s ll struggling to morph into a BPO or service company. So, to be clear, in the context of this paper, “full-service TEM providers” are those that take on the TEM func on for you. They invest in more than just so ware. And as a result, when you meet them, you hear more about process, about people and about how they are going to take responsibility for truly solving your TEM problems, rather than just providing a snappy piece of so ware but leaving all of the weight on your shoulders. Especially for enterprises that are resource-constrained, working with a so ware vendor and expec ng great outsourcing services can lead to disaster. But what if you’ve talked to several TEM providers, and they all claim to off er more than so ware? What if they all claim to be full-service TEM providers? Can you believe them?

2

“Over the past 10 years of market coverage, Gartner has learned that roll-ups can buy share but that doesn’t guarantee success.”

Eric Goodness,blogs.gartner.comDecember 9, 2013

Again, both Gartner and Cass agree: Not all TEM companies know the true meaning of service. Some TEM providers are what Goodness calls “roll-up companies” or so ware companies that grew through the acquisi on of other so ware companies–and that doesn’t necessarily breed customer sa sfac on. Instead of focusing all their energies on process improvement and one central system, roll-up companies have to spread their resources across mul ple so ware pla orms. Goodness noted, “Over the past 10 years of market coverage, Gartner has learned that roll-ups can buy share but that doesn’t guarantee success.”

So which companies are true, full-service TEM providers and which ones are masquerading as ones? Trust the 5Cs to help you fi gure that out.

#1: Capital. As in Cold, Hard Cash.This is the most overlooked piece of the vendor selec on process for most enterprises. But consider this, if you’re looking for a partner who is going to provide great service for the next 6-8 years (because who really wants to implement TEM every three years?), how important is it to understand what the owners of that company are planning over that period? If they wanted to sell the company in three to fi ve years, wouldn’t that be an important considera on? For long-term success with a TEM vendor, you need to look for companies that have a long history of profi tability and stability and a commitment to con nuing that stability for many years into the future.

Why Ownership Ma ers to YouSo make sure you understand the owner’s goals and plans. It is a public company? Is the company owned by an individual? Or is it owned by a private equity company? Most private equity companies are structured to sell the investments they make within fi ve to seven years. So if you sign a contract with a vendor who was bought by a private equity company, you can bet that the owners of that company are thinking VERY short-term. How will that impact the service you receive? The private equity owners might be pumping the company full of cash, but their strategy is to sell at a big profi t. So the cash is more likely to be poured into sales and marke ng and new customer acquisi on, rather than be used to enhance service delivery and to grow long-term customer rela onships.

On the other hand, public companies off er a high level of transparency, and you can learn a lot by reading public fi lings. If you are reading a company’s 10K and you can see that it only has enough cash to cover a few months of its opera ng costs, you might want to proceed with cau on. Cash-strapped

3

For long-term success, look for a TEM vendor with a long history of profi tability & stability.

4

companies don’t typically make adequate investments in people, process and tools to serve their customers. And in the worst-case scenarios, the company could even divert funds provided by clients for bill payment toward their own obliga ons–such as payroll. If the company is struggling to be profi table and has low cash reserves, can you expect them to invest in the personnel and resources needed to deliver top quality service? (Side note: Cass is a publicly held company, also off ering the protec on of a federally regulated bank, with $1.5 billion in assets and a long history of profi tability. Cass can aff ord to invest in its customers to ensure great service for the long term.)

Other TEM providers are owned by mammoth companies with tens of billions in sales. Their TEM business is a ny sliver of the whole. While well-capitalized, the company may not necessarily be inves ng in its TEM business and it almost certainly isn’t on the radar of the C-level of that organiza on. If that’s your pick, and if there are problems, will you get the a en on you need from the real decision makers?

Recommenda on: Look for cash-rich, profi table, publicly traded companies that can demonstrate that they are growing and commi ed to hiring to fulfi ll their service commitments–not just adding salespeople to sell their so ware. And watch out for private equity-backed organiza ons. Their goals are not likely to be matched up with yours. (Unless, of course, you enjoy issuing TEM RFPs every three years.)

#2: ChangeWhen change happens, whose workload is it? Yours or theirs? If it’s yours, you have the wrong TEM provider. World-class, full-service TEM providers manage change for you, relying on their proven processes. By change, we’re talking about much more than the tradi onal Move, Add, Change, Disconnects or MACDs. When you interview prospec ve TEM providers, ask about these processes. In the TEM world, that includes

• New hires/employee departures• New loca ons/facili es• Cost center changes• So ware/applica on upgrades• New carriers/services/contract rates• Network/inventory changes• BYOD enrollment/termina ons/changes in s pends• Technology migra ons• Changes in user behavior (overseas travel, usage spikes)• Business unit/accoun ng cost center changes• Changes in repor ng requirements• Collabora on changes aff ec ng connec vity to the TEM system• Security protocols

“When change happens, whose workload is it?”

5

Most TEM customers will tell you that the upkeep of the TEM system is a constant pain point because too o en, their vendor puts the responsibility on them. A full-service TEM provider won’t do that. Your TEM provider should make sure inventory is updated, that the latest contract rates are in the system, and that any cost center changes are set up. And these things should get done in less than one day from when you no fy them–without extra charges. Such change processes should be painless, too. A er all, service providers are known for quick, accurate service.

Elsewhere in your IT service world, your organiza on may employ ITIL-focused principles of change management whereby proven processes are used to systema cally document and address change. Similarly, your full-service TEM provider is a s ckler about managing change. The integrity of your TEM func on is based on profi ciency in documen ng changes that aff ect costs and service levels. You must be able to catalog changes in telecom services and devices (a.k.a. confi gura on items or CIs) such as mobile devices, network assets, POTs, etc. If you can’t manage a changing asset inventory, you can’t know if an invoice is correct. We see many companies who try to deploy their TEM solu on without engaging their engineering teams to create a no fi ca on process for network changes. That’s a big mistake. If detailed circuit inventory data isn’t updated at the me of order, it will be impossible to audit charges for that circuit at a feature level.

Here’s a tell-tale sign that your TEM provider’s approach to change is too lax–if they only audit based on whether an invoice amount changes from month to month. (A fi h grader could do that.) To maximize cost savings, audi ng must be done at the feature level–every circuit, every device, every month. And to do that, you need to integrate change management into your process and you need an authorita ve inventory record.

Recommenda on: Ask what happens–and who updates the TEM system–when you have new carrier rates, when cost centers change, when you open or close a loca on, etc. Obviously, only the customer organiza on must communicate these changes to the TEM provider. But if it’s up to your team to load changes into the system, you have purchased TEM so ware, not a true service. So ware companies love to work with customers that simply want to use their tools. A full-service TEM provider uses its own tools to get the job done, so that its customers are managers, not DIYers.

#3: CostBy focusing on cost, we don’t mean the cost of the service. We mean the number that really ma ers: ROI. Does your current provider demonstrate clear value above and beyond the cost of the service? Can you see what they’ve achieved in cost savings? Here are the numbers you should know:

6

1. Pure cost savings – Savings achieved through invoice audi ng: an amount that refl ects billing errors found, reconciled and credited.

2. Cost avoidance – Savings achieved through service changes recommended by your TEM provider. This would be things such as op mizing rate plans and turning off zero-usage devices. To make impressive strides here, the process for you to receive and approve recommenda ons needs to be easy. The less fric on, the more likely your staff is to take ac on. Make sure your provider approaches these recommenda ons proac vely, and make sure you have reports that show how much you’ve reduced your monthly expenses by ac ng upon their recommenda ons.

3. Procurement savings – The repor ng from your TEM solu on should be robust and detailed enough that it’s invaluable during procurement cycles. And to boost that value, does your supplier have procurement professionals on hand to lead or support your procurement projects? If so, what have they saved you?

4. FTE savings – Do you get the benefi t of auditors and analysts with years of telecom-focused experience–without adding more specialists to your payroll? Here’s a good way to measure the value that you get from your current TEM provider: Es mate how many people you would need to hire and what that would cost if you fi red your TEM service. (Note: If your answer is that you wouldn’t have to hire a single person, then you don’t have a TEM service, you have TEM so ware. In other words, your in-house TEM team is the provider.) Don’t forget to think about FTEs in accounts payable. If your TEM provider is managing the full lifecycle–from procure to pay–they are also making sure that charges are allocated properly to the right general ledger accounts, that credits are being applied, late fees are negligible, etc. If your current TEM provider doesn’t streamline the payment process, then it’s either not working effi ciently or your internal AP department is picking up the slack.

5. Cost of Interrup ons – A common theme among unsuccessful TEM programs is that service interrup ons con nue to occur–and those interrup ons stop business, risk revenue and damage customer rela onships. What is the cost of a service interrup on to your business, to your career? When you get a call from the VP of Sales because a cri cal call center is down on Black Friday, that’s not a good day for anybody–and you’re le thinking, “Why didn’t my provider help me avoid this?” At Cass, our customers experience less than one service interrup on for every one million circuits we manage.

Recommenda on: Ask prospec ve providers to give you sample savings reports for their clients. Interview their customers and ask if they can actually calculate their ROI. Ask about service interrup ons. If you don’t get a very clear picture of the value and performance provided by that vendor, keep looking.

Numbers you need to measure TEM ROI:

1. Savings from invoice audits

2. Savings from cost avoidance (op miza on)

3. Procurement savings4. FTE savings5. Cost of business

interrup on

7

#4: Cycle - As in LifecycleToo many TEM programs are just focused on invoice processing. But to eff ec vely manage a telecom environment, you need a solu on that integrates the en re business process from procurement to payment. It’s a lifecycle that never ends.

If you can’t answer the following ques ons at each stage, you’re leaving savings opportuni es on the table:

Sourcing:• What rates/prices are other companies my size able to nego ate?

• What are the best contract terms that my providers will agree to?

Ordering & Fulfi llment:• What did I buy (in detail) and when did I buy it? When should I start

paying for it?

• Did my carriers meet their SLAs? Am I owed any credits?

Payment:• Are we incurring late fees? If so, how much? Some IT execu ves believe

they don’t pay late fees. In truth, however, according to a 2014 AOTMP study, companies using a TEM provider pay on average .63% of their total spend in late fees.

• How do I make sure that every bill gets paid on me so service interrup ons don’t happen? Do I believe in my TEM provider’s commitment to making sure my services stay on?

• Which departments/business units/loca ons are incurring the costs of each service? Are these costs ge ng allocated accurately?

Termina on:• If I close a loca on, what circuits do I need to terminate? What circuits

do I need to change to avoid being over-trunked?

• When did I issue the termina on? When should I stop paying?

• Should I be paying any termina on fees?

If your TEM provider tackles just the linear process of managing invoices rather than the whole integrated lifecycle, some of the job isn’t ge ng done. So the work falls back to you. And, without visibility into the whole process, how on earth can you expect whoever is doing the audi ng to fi nd everything they should? (It’s that same complaint as before: If no one is connec ng the changes that happen throughout the lifecycle, then your inventory isn’t ge ng updated. And without an accurate inventory, you have no authorita ve record to use in audi ng.)

The Telecom Lifecycle

Recommenda on: Don’t assume that because the word “lifecycle” appears throughout the sales pitch that the company you’re evalua ng will really be a fully accountable manager throughout the lifecycle. Use the ques ons above to guide you in cra ing your RFP. And ask to see a staffi ng plan so you can see how the provider intends to staff your account to provide full lifecycle services.

#5: CoolnessWhen it comes to a TEM rela onship, too cool can be bad–especially if it’s just there to distract you from what you’re not ge ng. In other words, separate the sizzle from the steak. Don’t let yourself be distracted by the shiny bauble of cool so ware features that you’ll never implement. You want a partner that will take the weight of mobility and telecom management off your shoulders. You need me-tested more than you need trendy. You need accuracy and consistency more than you need sexy. True full-service TEM service providers operate so well that you don’t really care about the tools at their disposal. You just know the job gets done and you have clear visibility. How do you know if you’re talking to a full-service TEM provider or a TEM so ware company? Hint: When service providers innovate, they tend to focus on con nuous process innova on, not just code. TEM so ware companies spend more of your me selling you on features–features that most of their customers never even implement.

Recommenda on: If the salesperson’s deck is devoted to the cool factor, start asking ques ons about process. Are processes well documented? What does service delivery look like? What’s their response me to client requests? Who is responsible for each step of the procure-to-pay lifecycle? Select the company that is just as geeked out about their processes and service quality as they are about their so ware.

Seeing a Diff erence in TEM Companies Now?By using the 5Cs–Capital, Change, Cost, Cycle and Coolness–you should be able to sniff out a so ware company pretending to be a full-service TEM provider. To review, so ware companies tend to invest the large majority

of their me and resources in building, marke ng and selling so ware. When you engage with them, you’ll probably be off ered a lot of so ware demos. Full-service TEM companies, on the other hand, invest in their PROCESS–in the delivery of services that eff ec vely take away the drudgery and day-to-day management of TEM and produce measurable effi ciencies. They will brag about what they will do for you and showcase process results.

Talk to several companies to get a feel for their sense of accountability. Some companies are very comfortable to be held accountable to deliver results, while

8

CONTACT USVISITwww.casstelecom.com for addi onal resources, including case studies.

Cass Informa on Systems (Nasdaq: CASS) provides telecom expense management, managed mobility services and BYOD solu ons. Its clients include Na onwide Insurance, Staples, Michelin, Aarons Rents, Charming Shoppes (Lane Bryant, Fashion Bug, Catherines), Cumulus Media and Sonoco.

©2015 Cass Informa on Systems, Inc.

www.casstelecom.com866-796-2200

PTEM09-092115

others only want to be on the hook to deliver good, working so ware. When results aren’t as expected, the so ware companies will o en blame your inability to fully u lize the so ware. (Service providers don’t care if you aren’t profi cient in all the features and func onality of the TEM so ware pla orm. A er all, that’s their job.)

Will your new TEM provider earn your business for more than three years? We hope so. Buy with the 5Cs in mind–and you’ll fi nd a rela onship that lasts.

9