TEMpest In a Teapot?

Remember five and six years ago when telecom expense management (TEM) was all the rage? At the time, TEM referred to oversight of wireline services as big-name providers bombarded the channel with claims that auditing customers bills for unused or overpriced circuits was the greatest Gold Rush since IP. But that narrow focus grew outdated as businesses wireless and IP-services usage began to soar. Meantime, the giant TEM software providers, still heavily emphasizing wireline TEM, were failing in the channel as they asked too much from agents for too little in return. Many partners saw the futility in both a restrictive definition of TEM and in aligning themselves with the large platform developers. Those agents have since expanded their interpretations of TEM to life cycle, rather than expense, management to find their own ways to profit. Still others have discovered that while audit-focused TEM carries little financial impact by itself, its useful as a jumping-off point for a consultative sale and a way to shore up customer loyalty.

Dan Vidal, co-founder and managing director of Telecom Advisors Inc., is one agent who has experienced both the promise and pain of TEM. He continues to include TEM in his sales strategy despite sour experiences with brand-name providers. It was like pulling teeth,” he said, recalling those early relationships with TEM companies whose attitude toward the channel was less than friendly compared to the way carriers treated him. Specifically, these marquee names wanted agents to pay thousands of dollars for software each month, give up ownership of the customer and often imposed annual quotas of at least $1 million on potential partners. Those stipulations didnt fly with many agencies and Vidal was not alone in seeking other options.

For Vidal, the answer lay with a network-services reseller, Wholesale Carrier Services, which last year contracted with mobility management firm eMOBUS, as well as another agency that helps with manual auditing and back-office processes. These alliances allow telecom advisors to assume the role of trusted adviser with end-users, acting as their outsourced IT department for far more than auditing and asset inventory. In Vidals case, expense management helps identify customers pain points  particularly apparent in mobility  and lets him solve those problems with moves/adds/changes, inventory, repairs, SLA enforcement and more. But counting on TEM to carry a sale doesnt make sense for him. I dont even use the word TEM with my clients,” he said.

Thats a widespread sentiment. Only transactional agents depend on bill auditing, sources say, and that narrow view wont get them very far. These days, agents say, TEM ought to be considered part of a bigger process: lifecycle management. With wireline and wireless services on their books, not to mention the cloud, customers need help overseeing everything from service ordering, asset and expense management to invoice visibility, auditing and reporting. The more successful agents have moved on from an audit and asset-purchasing perspective to offering holistic managed services.

The services TEM providers offer are alive and well, but theyre being done by top consultative partners as part of a value-add,” said Matt Harty, president and CEO of Converged Network Services Group (CNSG).

Indeed, some channel partners charge for those functions while others view their extra efforts as down payment on customer loyalty. Jim LaBrec, a CNSG agent and owner of Converging Technologies Inc., imposes a fee, yet makes sure his clients save more than they pay. Hes finding that cloud services are creating demand for communications life cycle management, as opposed to the audit-intensive TEM. End-users are so confused about the cloud that they want an expert to handle the service for them, from beginning to end. And LaBrec wanted to outsource time-consuming tasks such as trouble management and back-office provisioning. For that he was lucky to find One Source Communications out of Greenville, S.C. He was even luckier because One Source lets LaBrec retain ownership of his customers, which other TEM providers would not allow. Now, with the help of One Source, LaBrec said, Im scalable to levels way beyond what you could have ever thought of doing.”

As LaBrecs success illustrates, moving beyond the pure definition of TEM as audits and asset supervision frees agents to expand their business models as technology, too, evolves. And as Telecom Advisors Vidal noted, growing accustomed to the life cycle management philosophy makes a big difference. Its a great opportunity for channel partners who embrace it in the right way,” he said.

When it comes to telecom life cycle management, wireless is a growing pain point. Think of the large companies that use more than one carrier because they need nationwide and even international coverage. Then consider the thousands of employees consuming those voice and data minutes. Then theres monthly procurement fulfillment and weekly or daily service ticketing. The more factors in play, the more end-users need help to avoid overages and unused lines, for starters. Wireless TEM can involve device-procurement and help-desk services, too; however, agents will make the most money off of adds, moves and changes, said Geoff Yearack, director of wireless and mobility for Telecom Brokerage Inc. (TBI).

To do that, agents will have to find that rare channel-friendly company that helps with mobility management, or use manual processes. The incumbent TEM providers still want a significant chunk of change from partners for their software. To wit, the average wireless expense management platform sells for between $4 and $10 per device  for a single service such as optimization. As soon as the customer wants a fulfillment portal or customer support, the price goes up, agents report. The expense management companies need to get off their high horse,” said Yearack. Do you want to be in this channel or not? Thats the question.” If the answer is yes, TEM companies will have to offer their portals through a low-cost SaaS model, he recommended. I think they would hit a home run.”

GSG Telco says its one of the providers willing to do just that. We do allow the agent to private-label MobileManager and own the customer,” said Andy Goorno, CEO of GSG. We also do not charge a license fee for our software.” Instead, GSG bills per device and requires a minimum of 250 devices per sale. And while GSG seems to be one of the TEM providers more open to working with the channel, its looking for master agents rather than independent agents. We are very selective in choosing partners,” Goorno said, noting that GSG wants to be sure an agency has enough customers and employs consultative salespeople.

Regardless of the trend toward life cycle management, some agents are doing well with a more traditional interpretation of TEM. San Jose, Calif.-based Telapprise is one such agency. In fact, the company originally was built around providing TEM alone. Only later  when competition in the wireline TEM space came to a fever pitch  did the company start to sell carrier services and consulting around it. The approach has worked. TEM is a decent amount of our revenue and we will never forgo that,” said Marko Spremo, vice president of sales and co-founder of Telapprise.

Telapprise uses three channel-friendly vendors to provide TEM, but some agents have taken TEM into their own hands. One Midwest agent, for example, has clients who pay $1,000 per month for wireline and wireless expense management, done on a spreadsheet by an in-house employee. Another option is using another agencys tools. Master agency MicroCorp Inc., for one, has created a TEM platform that it licenses to subagents who can choose whether to charge customers for TEM services including inventory management and bill auditing. End-users also can oversee services they didnt buy through MicroCorp via the portal.

Despite enabling the service for its agents, TEM itself isnt a big draw for MicroCorp. Im not seeing a huge influx of I have to have TEM as part of my value proposition,” said Brad Miehl, president and CEO of MicroCorp.

CNSGs Harty agreed. His company leaves TEM to its agents because theres little demand. We really havent run across that many companies saying to us, We want the full-blown version of TEM that everyone thought was going to be the end-all, be-all,” Harty said.

Sound Off: What Is the State of TEM in the Channel?

I think its just kind of there as a service offering. I dont think its there as an exciting service offering.”
MicroCorps Brad Miehl

I dont think theres a definitive state. What I do think is happening is the savvy agents realize it would be nice to take a trusted adviser or consulting role, and one piece of that puzzle is TEM.”
Sandler Partners Alan Sandler

Its a state of confusion. I think theres definitely a play and TEM definitely is neededbut the space needs more maturing and more guidance in terms of the agents role with it.”
Telecom Advisors Dan Vidal

Its not the next great thing people thought it would be. Its relevant in some aspects, but not as a standalone component.”
CNSGs Matt Harty

I think its static right now, I really do. The No. 1 thing agents dont want to do is give up ownership.”
TBIs Geoff Yearack

Agents look at TEM as a way to protect their services, not a way to provide an offering.”
Telapprises Marko Spremo

I think its more and more compellingbecause the agent is going to go the way of the dodo bird if they dont make the migration from dependency on telecom services to more of a managed services platform.”
Converging Technologies Jim LaBrec



Select Channel-Friendly TEM Providers

  • Asentinel                                     
  • eMOBUS                                     
  • GSG Telco                                    
  • One Source Communications             
  • Spectrum Inc.                          
  • Telesoft                               

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