Beyond Technology Expense Management
Beyond Technology Expense Management
Beyond Technology Expense Management - 1
Reducing costs, not heads is good for business - 1
Sharing information is critical to realising value - 1
Accessing understandable information is key - 3
Sample Reports - 3
Conclusion - 6
Reducing costs, not heads is good for business
It has long been understood that getting costs under control is seen as low-hanging fruit when it comes to increasing profitability.
Technology expense management (TEM) has long-held out the promise of holding you vendors accountable of their invoices to you and helping your organisation manage the myriad of costs associated with hardware (on-premise and cloud-based infrastructure), data and voice costs (in and out of contact), adherence to Service Level Agreements and contractual rate cards to name a few of the cost-saving drivers.
To some extent this promise has been realised, and many companies have realised savings in multiples of their upfront and on-going investment costs in TEM solutions (technology and supporting consulting).
Our experience has been that not only is money saved through a reduction in future expenses but in cases where over-billing or incorrect billing has been invoiced successful recoveries have meant reimbursement for those costs – actual cash back.
We have helped businesses realise on-going savings and recoveries for incorrectly billed expenses by giving them the ability to reconcile their contractually agreed rates against your actual billings. Both the customer and the vendor benefits from early identification of billing issues because invoices can be paid faster, and queries are resolved in an efficient fashion based on data and a robust workflow process.
Just as an example, these are some of the benefits our customers have received
Sharing information is critical to realising value
With companies needing to share information across different divisions and with a plethora of different tools in place in those divisions performing specialist tasks, transferring information from one division to another can be a Herculean task.
A common issue for most companies though is that solutions such as TEM are implemented for specific departments or business areas and as such are not easily integrated with other systems which makes data-sharing a challenge. Of course a skilled consultant can always extract data from one system, manipulate it into a suitable format and import it elsewhere; but this task always takes time and by the time the integration is complete, the decision which needed the integrated results may already have been made due to other constraints such as meeting a deadline. In that case, the work performed by the consultant can only serve as a historical reference point.
A TEM solution which stores information in a central location and can share relevant data with other authorised business areas and functions without the burden of manually exporting, changing formats and re-importing has obvious benefits in both keep the time-value of data current and increasing trust in the decision-making process.
Some areas where integration would be beneficial include:
- Notifications where recurring costs suddenly increase or where an additional service is being billed
- Procurement would be interested to check if the contract was being adhered to
- Finance would surely like to know that they’re not going to make an incorrect payment
- IT Operations would be able to confirm the details of any new services or reasons for additional costs
- Being able to use the actual data as the basis for budgeting and planning
- What happens if you increase the number of data SIM card in use and you cross into a bigger discount band per your contract? Will you overall costs reduce?
- What is the effect of consolidating similar services or goods from different vendors under one vendor and using this as the basis for issuing a Request for Proposal for a single vendor to supply these goods or services.
Our scenario planning module demonstrates the power of integration and what can be achieved.
Accessing understandable information is key
A fundamental of any solution which purports to turn data into information is that it is easy to use and does not promote complete reliance on external consultants to get results.
To give you a head-start a combination of pre-built reports and dashboards which answer most of your common expense and questions, complemented by a self-service module is best.
By using one of the pre-defined reports for your investigation and with the ability to apply filters, drill down into underlying detail, perform text-based searches, ranking and scenario-planning you can quickly answer your questions with a minimal amount of effort. Of course, if you wish to export to Excel (with an optional add-in for fully interactive analytics in Excel) you can do this as well.
Figure 1 - Value Driver Tree
Figure 2 - Vendor Cost Report
Figure 3 - Cost Category Report
Figure 4 - Expense Report
But invoices and transaction data don’t use terminology which businesspeople understand?
This is why we have developed a classification engine which assigns attributes to invoice line-items so that you can understand the data in your terms. Of course, you can always change these attributes or re-name them if you wish as well.
A hypothetical line item might appear on an invoice as:
What do you need to know about this?
- Quantity (1)
- Line Speed (20Mb)
- Line Type (Fixed)
- Duration – monthly (as determined by the period)
- Site (the Data Centre)
- Cost – R2300
We believe you should be able to analyse this data using easy to understand terms:
Cost Category: Fixed (is it recurring or once-off)
Expense Type: Data, Fibre, Hosted
Service Site: Real Tech Data Centre
Now think back to the integration requirement. If you wished to query this invoice, or even just this line item, you should be able to create an invoice query or dispute process with the vendor where you provide evidence from the contract that this item (hypothetically) qualifies for a discount per the contract or that it was cancelled three months ago. In both cases, supporting evidence needs to be provided.
Using the Invoice Approval Module, you can approve, reject and dispute any invoice. The workflow is audit-able and fully trackable, and you can ensure that the query does not remain un-actioned based on an age-analysis for tracking.
Figure 5 - Invoice Approval
TEM is not just about managing your technology expenses. It impacts the entire organisation in that a better bottom line is good for business, good for shareholders and supports transparency and openness.