Market Guide for TEM Service
Published 22 December 2021 by Katja Ruud, Lisa Unden-Farboud, Pablo Arriandiaga
Sourcing, procurement and vendor management leaders need TEM vendors that provide a cost-efficient solution to enable and support effective commercial management of communications services. Trends include focus on automation, data analytics and technology simulations.
Overview
Key Findings
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Following the COVID-19 pandemic, enterprises maintain their ambition to cut actual costs, reducing like-for-like spend. By now, they are increasingly also factoring in softer cost savings for process improvements and keeping inventories up-to-date.
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Gartner client interactions show that enterprises want telecom expense management (TEM) providers to manage logistics and, increasingly, to take on life cycle management services for end-user devices. They are also expecting more proactivity from TEM providers in streamlining their estate across technology towers, eliminating duplicity.
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Enterprises seek ongoing robust management as a key benefit of TEM; yet they still suffer challenges associated with inadequate statements of work and reactive rather than proactive engagement models. This leads to dissatisfaction with the quality of the service and hidden costs.
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Many mobile tariff plans are now flat-rate-structured, with a significant amount of spend included. Consequently, there are fewer anomalies to detect, less optimization to execute and fewer changes. Such contracts are easier to manage. Other contracts, such as those for WANs, are much more complex to manage. We may therefore see different charging levels for different environments.
Recommendations
Sourcing, procurement and vendor management leaders who evaluate the business case for using and subsequently identifying suitable TEM vendors:
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Evaluate TEM vendors on their ability to meet ROI expectations. Evaluate existing capabilities and vendors’ roadmaps and vision by requesting they distinguish between what is available now and what new services or features have been approved from what may be a general evolutionary direction.
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Mitigate operational management disappointments by obtaining clarity around processes underpinning the operational model. This includes verification of the SLA track record, identifying roles and responsibilities in a governance model covered in the contract, and defining implementation schedules and scalability of services for different geographic regions and any potential partners.
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Evaluate and challenge TEM vendors also on their roadmaps. Consider how you may want to use them going forward, whether for other types of technology expenses, for more corporate expenses or for more device life cycle management capabilities.
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Request transparency into the logic applied to the proposed price model by obtaining insights into the processes for delivering value throughout the contract period. This is important as many models are applied and can cause confusion.
Market Definition
This document was revised on 13 January 2022. The document you are viewing is the corrected version. For more information, see the Corrections page on gartner.com.
Telecom expense management services enable enterprises’ IT, procurement and finance departments to order, provision, support and manage costs of corporate telecommunications, associated IT services and their inventories. (These may include fixed and mobile telephony and data, cloud licenses, unified communications as a service [UCaaS] licenses, and Internet of Things [IoT] connectivity.) TEM services also include business intelligence (BI) and reporting suitable for supporting C-level strategic decision making. Gartner’s TEM coverage focuses on SaaS-based applications and platforms, managed services, and associated professional services.
Market Description
TEM providers are evolving their offerings as enterprises’ consumption (especially of fixed and mobile data services) grows, and providers now incorporate expense management of other adjacent services and communications-related asset tracking. These offerings include inventory tracking of cloud/consumption-based services; other IT-related services, such as UCaaS; and IoT expense management.
To cut and control costs and unproductive duplication of feature availability to end users, enterprises want to effectively manage this complexity and its associated costs. Third-party TEM providers are becoming a cost-effective way to secure needed program management capabilities. Therefore, enterprises look to TEM providers with the capability areas illustrated in Figure 1. (For detailed definitions, see Note 2.)
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