Tim Wise and Scott Fogle co-founded Advocate Networks seven years ago as a telecom agency, but today count wireless telecom expense management as the fastest-growing segment of their business.
These two Eagle Scouts launched the carrier services agency in July 2001, but realized a couple of months into it that the time-to-revenue was longer than was sustainable for the fledgling business and evolved it into a consultancy. The formula was familiar to the partners; Wise’s background is as a lawyer and Fogle’s is in professional services. “It’s called survival,” Wise said about Advocate’s accelerated path toward a new business model — one that was hastened further by the market impacts of the Sept. 11, 2001, terrorist attacks.
Advocate’s further evolution brought on a formalized managed services offering in 2003. “It’s really where our customers pushed us,” said Wise. “The managed services offering for us was effectively operationalizing our consulting business, or creating a recurring model around our consulting business.”
Today, the 32-employee, Atlanta-based agency is in the Inc. 5000 and will do approximately $7 million in revenue this year via two divisions: 65 percent consulting and 35 percent managed services, powered by the Rivermine TEM software application. Specifically, the mobile management offering makes up about 40 percent of revenue, or about 15 percent of Advocate’s overall revenue.
Advocate currently has about 15,000 devices under management; and although that number might be small in comparison to other TEM providers, this Southeast regional agent deems wireless TEM its fastest-growing revenue stream and Wise said that’s where he sees the most demand in the marketplace. “Wireless continues to expand and has historically not been centrally managed by IT,” explained Wise, saying that since wireless spend now exceeds wireline spend, this has become a pain point for IT departments.
After evaluating several TEM platforms, Advocate chose to partner with Rivermine because they felt the way Rivermine was positioned in the marketplace aligned with Advocate’s goals — Advocate could provide the midmarket solution while Rivermine was focused predominantly on the Fortune 500. Advocate targets the midmarket, companies with $1 million to $20 million in annual telecom spend. The software solution allows Advocate to execute inventory management, bill management, order management, change management and vendor management, charging a fee for the services and sometimes leveraging the carrier piece of that to subsidize that cost or reduce that cost. The company also operates a wireless help desk, which provides activation and user support, technical support and migration support.
Advocate attributes its success in the expense management arena to a truly customer-centric product. Even though Wise and Fogle didn’t build it themselves (and Wise suggests partnering with an expert TEM platform provider opposed to taking on the huge task of building it yourself), they chose a partner, built their offering and go into each engagement with the goal to provide solutions very specific to each unique client.
“Where we’re successful is where we go in on a consulting engagement, help clients understand first their current state, help them map out their business and then it’s easy to position an ongoing mobile program,” said Wise. He explained that the consulting business is the perfect lead-in to selling TEM, and once he can show the client the need for it, he lays out the options for a solution. They can deploy internal resources and manage it themselves, they can even look to other players in the TEM market, or they can, of course, partner with someone they already work with and trust, Advocate.
Wise said Advocate has a different perspective than most of its competitors. He said the way in which Advocate formed its offering, and continues to evolve it, is much more focused on the customer and its business requirements versus the model of creating a service and then finding a market after the fact. Wise advised that agents talk with their customers first and truly understand their requirements before running out and partnering with any TEM provider. Agents must understand their customer segments before assuming there’s a blanket solution for everyone, he said. Playing a consultant role
and leading into a TEM sale with an assessment not only gives an agent a better understanding of a customer’s needs, but also gives a customer more confidence that the agent knows what’s needed to improve operations and reduce spend. And although Advocate typically sells TEM or wireless TEM in this follow-on engagement fashion, the company is still seeing more activity and interest for these solutions on a standalone basis and as first requests from clients.
To enforce its trusted advisor role, Advocate plans to stay fairly local, becoming trusted experts in its region as opposed to covering the nation. Furthermore, the company aims to stay in very close contact with its clients, not forcing several levels of employees between them. To that end, Advocate only has a handful of subagents that make referrals and generate about 10 percent of the company’s overall sales, but Wise said he isn’t looking to add many more. “Our model has never been to be a master agent-type model, so we’ve got a very small and selective indirect channel,” he said. “We’re not looking to have 50 or 60 subagents because we just find that impacts overall quality, especially in a managed services environment.” Wise said this structure allows them to have several touch points with their clients, a defensive strategy that will keep Advocate in the minds of clients and prevent them from taking additional business elsewhere.
For agents considering adding TEM to their portfolios, Wise warned that partnering with a TEM provider and offering that to clients, whether the client manages it or the agent does, is quite often a tall order. Wise said that Advocate definitely underestimated what a task it would be to manage a TEM application. “It’s simple to think of local, long-distance, wide-area network components, but the way in which those are provided, organized and billed by the carriers, and [representing] that in a workflow and in a software application is very, very challenging,” said Wise. And managing a mobile environment that is changing constantly only serves to compound the complexity of the task.
Furthermore, Wise said agents should be prepared to face the biggest challenge of selling TEM solutions, which is coming up against internal control. Oftentimes, IT departments, just as with any other corporate function, feel the need to control all solutions internally and find it difficult to relinquish that management to a third party, he said, adding TEM providers often must combat a damaged reputation when a previous failed TEM solution has left a bad taste in the customer’s mouth. But as the TEM and mobile management markets grow and the challenging economic environment provokes enterprises to seek effective outsourced solutions, Wise and Fogle are counting on agents finding more acceptance and readiness for such applications in their client bases.
Read more about the emerging demand for wireless TEM offerings in Air Apparent: Could Wireless Be TEM’s Crown Jewel?