Air Apparent: Could Wireless Be TEM’s Crown Jewel?

You just can’t survive without it. This is what telecom expense management practitioners will say about including wireless expense management along with their wireline offerings. Why would a company work with a TEM provider that only had wireline management tools? Even if the company doesn’t yet need the wireless component, they most likely will some day. Partnering with a TEM provider that rules only half the kingdom — whether it’s the wireline or the wireless side — is a questionable business decision.

TEM companies with one-sided offerings took note of an emerging demand for a unified TEM offering, causing an influx of mergers and acquisitions in the space. (Read Corralling Complementary TEM Solutions.) Case in point, 2007 saw mergers between Tangoe Inc. and TRAQ Wireless, Rivermine Inc. and BBR Wireless, Invoice Insight and Oreon Inc., the list goes on. And it doesn’t take a soothsayer’s declaration to predict that evolving technology will continue to drive activity in this space.

Never-ending change is the nature of managing mobility. Thanks to a widely dispersed variety of handsets, ever-evolving rate plans and good ol’ employee churn, the wireless TEM market only stands to grow as more and more companies cut the cords, so to speak. A report by AOTMP, “Wireless Mobility Management: 10,000 Decisions to Manage,” found on average enterprises support 7.5 different types of devices, three operating systems for wireless devices, more than four applications for deployments of more than 4,000 devices, and more than three wireless telecom service providers. The report notes that the complexity of managing wireless expenses is compounded by the fact that wireless providers are governed by different regulations, have different revenue models and bill differently than their wireline counterparts.

“Unfortunately, for many end-user organizations, the complexity of wireless management is not limited to just cost-per-minute and roaming charges,” said Ralph A. Rodriguez, senior vice president, research, technology markets group, at Aberdeen Group, in a recent report. “Without focusing on the total cost of ownership of a wireless deployment, enterprises can drown in activation costs and early termination fees.” In addition to the escalating costs of managing wireless devices and wireless plans, Aberdeen found a host of reasons driving companies to formalize their wireless expense management programs, including simply keeping up with moves, adds, changes and deletions (MACD) (see chart, Key Pressures Driving Wireless Expense Management).

view largerKey Pressures Driving Wireless Expense Management

Joe Basili, vice president of research at AOTMP, aid the wireless TEM market is not only growing, but it is maturing and evolving to include wireless mobility management as enterprises expand their wireless mobility programs from just cell phones into smart devices. “Enterprises must develop broader programs that address policy governance and endpoint security,” said Basili, pointing out the sensitive data that resides on these devices. AOTMP found that 96 percent of enterprises provide e-mail via smart device, and 51 percent of enterprises provide employees the ability to view documents. “Enterprises have significant exposure in terms of the ‘street value’ of an executive’s device that contains sensitive corporate data. The wireless TEM market now has an opportunity to mature by helping enterprises address this challenge with an offering that goes beyond expense management,” said Basili.

Al Rossini, senior vice president global sales and marketing for Tangoe Inc., agreed there is a movement toward mobile lifecycle management. He said TEM services have expanded to be

all-inclusive, covering mobile policy development and enforcement, mobile contract negotiations, invoice processing and allocations, provisioning and fulfillment, inventory management (e.g., MACD), and over-the-air programming.

Rossini explained in addition to increasing security concerns, managing tax liabilities of mobile services also will fuel this market. With the market evolving to address these concerns, Rossini said companies that can select and employ TEM services “with an eye toward future mobile technologies and application requirements will be more likely to successfully manage the mobile explosion” currently taking place.

Adding Wireless to Your Coat of Arms

For agents, the growing market of wireless and/or mobility expense management is ripe for the picking. In fact, a recent enterprise survey conducted by Aberdeen Group found that more than half the respondents had not begun implementing a wireless expense management solution (see chart, Average Age of WEM Implementation).

view largerAverage Age of WEM Implementation

The rapid growth of the market and the proliferation of wireless devices should prompt agents to run to their customers’ aid. AOTMP found that 43 percent of enterprises said they do not have enough automation to manage their programs, and 36 percent of enterprises do not have the appropriate resources.

“Agents can gain by solving enterprises’ challenges,” said AOTMP’s Basili. “The professional services that help enterprises enforce policies and provide help desk support for users that need to remotely kill or disable the data on lost devices and remotely manage updates to applications help agents move from a model of one-time services to a recurring revenue model that addresses ongoing challenges of their enterprise customers.”

Tangoe’s Rossini said when agents move beyond selling devices and rates to their clients, and instead provide “services that surround the entire lifecycle of the mobile device, the ‘stickiness’ of services will be increased, leading to revenue and retention gains for the agent.”

Rossini warned that agents likely might face pushback from clients regarding the unpleasant perception of the fox watching the hen house. “But the reality is

that mobile agents could increase revenues over the life of a customer despite the cost reductions they might identify on behalf of the client,” he said.

AOTMP found that the top challenge to managing wireless expenses was employee resistance to corporate policies. “Enterprises that have their employees on employee-liable plans will not purchase wireless TEM because they believe the costs of having employees under a corporate plan exceed the benefits,” he said. However, despite customers’ reluctance, agents should be able to make the wireless TEM sale based not only on savings, but also on the security benefits of a centrally managed and monitored system.

Read An Advocate for Wireless TEM to learn how one agency made wireless TEM the fastest growing segment of its business.


Respond to Commoditization With Optimization

The term commoditization has been know to drain the color from many an agent’s face — but what does it mean to the world of wireless telecom expense management?

According to Joe Basili, vice president of research at AOTMP, the rollouts of unlimited nationwide voice plans with no roaming charges introduced a bit of commoditization to the market. He said although these plans set a ceiling on savings, he expects enterprises will find additional savings through optimization. “I would not be surprised to see a shake-out of suppliers that were making their money primarily through unsophisticated optimization services,” said Basili.“Suppliers would do well to differentiate themselves through valueadd services with portals to manage policy governance for ordering devices and services and ongoing management of endpoint security and help desk functions.”

Although these unlimited nationwide plans might be good for users that usually break their pool’s allotment, AOTMP reported for most enterprises, a managed corporate pool plan still provides a lower net effective cost per minute. To wit, AOTMP found that 84 percent of enterprises use pooled plans more than individual plans or flat-rate-per-minute contracts (see chart, Wireless Service Contracts).

view largerWireless Service Contracts

However, according to Jim Carroll, executive vice president of global wireless services for TEM provider Rivermine, “the popularity of shared-minute plans has reduced some of the unmanageable expenses of wireless rate plans,” he explained, “but there is still a strong need for expert assistance in managing the plans to achieve maximum savings.” Carroll said small decreases in cost per minute can produce tremendous savings in aggregate and are most easily managed through automated tools such as his company’s offering.

In fact, looking at the wireless market in aggregate might be the answer to the commoditization blues. The minute might be getting less and less fat — but that only means that their usage will get more and more common, therefore increasing the need for expense management plans and automation.


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