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Some telecom expense management (TEM) experts blame the IT and finance departments for destroying the telecommunications budgets with quick fixes such as continually changing vendors or purchasing new technology without fully comprehending the long-term financial consequences of the equipment they bought.

IT and procurement departments often perform a one time review of the company's telecommunications and make decisions that provide a quick cost reduction but ignore the problems that keep pushing costs upwards over the long-term.

Some telecom expense management specialists claim finance managers typically don't have sufficient knowledge regarding their company's telecommunications needs and do not have the expertise to fully understand new telecommunications technology. Their lack of knowledge can lead to unnecessary and costly purchases which can create budget problems for years.

Purchasing unnecessary equipment by finance and IT managers is a major factor for bloated telecom budgets but billing mistakes and inefficient procedures still must be addressed.

An efficient TEM program including a quality software package can significantly reduce costs. Mid-sized companies can often achieve close to a 20% reduction during the first year with a top-notch telecom expense management program. The plan, if properly managed will continue to provide savings on a yearly basis. To attain the desired cost savings, finance and IT department managers must comprehend the telecommunication needs of the company and not just look for quick fixes to the budget.

Typically, when a company needs to slash costs, the telecommunications budget often experiences a reduction. However, if the cuts are not done with the input of all the departments that are significantly affected by telecom expense management decisions such as sales and customer service the company can be significantly harmed.

One area which an understanding of high technology telecommunications equipment is not a top priority is negotiating contracts with communication service vendors. Several vendors should be allowed to bid on the contracts. However, it's not enough just to acquire numerous bids. Vendors will often make claims that their total package will lead to huge savings in phone calling costs, but often the buyer does not receive the total savings which were expected. To help avoid this outcome, the bids should be based on the company's actual communication bills for a half a year in order to truly discover which vendor will actually provide the most cost savings.

When companies decide it's time to cut the overall budget, they need to be careful they don’t reduce productivity and end up reducing revenues. When finance department managers get involved in telecom expense management they need to involve other department managers affected by their decisions. They need to fully understand the pros and cons of new technology and the long-term financial effects of the choices they make.

Telecom expense management is a proven technology for reducing telecom expenses and has provided dramatic costs savings and returns on investment (ROI) to corporations that have implemented TEM systems.

Further information about telecom expense management may be obtained from the Telsoft Solutions website at www.telsoft-solutions.com.

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