Every company aims to keep their IT expenses low. But when push comes to shove, several things can get in the way of financially managing telecom, mobile, and cloud services — most notably:
- The rising number of assets, services, and the increasing complexity of them
- The hours of administrative work necessary in overseeing assets and expenses
- Quantifying the potential gains of more effective management
In helping thousands of companies tackle these challenges, Tangoe has a unique vantage point in solving them. We’ve tracked $15B in IT spending across enterprises of all types, which means we understand how and where companies fail at cloud, mobile, and telecom expense management. Using client data, we’ve identified 10+ common ways that IT and finance leaders mismanage their assets, thereby losing time and money.
Explore the quantifiable impact of IT mismanagement below and get some surefire tips for maximizing your productivity and savings.
Telecom Troubles: 3 Ways Services and Expenses Get Mismanaged
Overspending: 17% of Telecom Funds are Squandered
Did you know that on average, companies spend 17% more than necessary on their communications services? Data tracked across thousands of companies shows that a clear focus on cost cutting can reduce annual IT spending, particularly if the company implements effective processes for telecom contract rate optimization. This includes price benchmarking, contract reviews, and market price intelligence helping decision makers know whether their current or proposed rates are competitive in the market.
Miscalculations: Invoicing Errors can Consume as much as 10% of Total Spend
Financial mistakes can drain your IT budget. Data demonstrates that invoice overpayments and billing errors can account for approximately 5-10% of a company’s annual telecom spending.
This is why validating expenses and auditing invoices can be a critical exercise. Savings can be achieved by identifying billing anomalies and credits due. Invoice optimization services can audit your existing service charges to find instances of waste and overbilling. Examples include charges for services not in use and ensuring services adhere to service level agreements and providers follow terms and conditions outlined in the contract. One-time optimizations shave off the highest amounts of overspending, while ongoing efforts continue to deliver value.
Telecom Time-Suck: Financial Analysis Requires 6 Hours per Report
It’s easy to overlook the amount of administrative work that goes into IT financial management tasks. Data reveals companies require 18.5 minutes to process and track invoices including audits and approvals. Whereas, Tangoe uses AI to process telecom invoices in 8 seconds.
Moreover, companies typically fritter away 4-6 hours per month compiling each financial report. This is in stark contrast to automated platforms for telecom expense management which:
- Accelerate analysis through algorithms,
- Compile reports for all types of stakeholders, and
- Deliver data visualizations and presentations in just minutes.
How much time and money could you save on telecom? Use our simple telecom savings guide to find out – you’ll get all the industry-standard calculations above plus several more.
Mobile Mayhem: 4 Ways Assets and Expenses Get Mismanaged
Glossing over Mobile Details Cost Companies 10-15% More
With a growing number of devices, tracking the corporate fleet can be increasingly difficult, but it pays to dig into the details. Thousands of clients have shown that accurate inventories can yield cost savings of 10-15% of their annual mobile spend. Tracking down devices, users, service providers, usage profiles, and contracts is a critical first step when optimizing mobile expenses.
Too Many Mavericks: Rogue Device Purchases Burn 1-2% of Budgets
Leave the buying decisions to employees and you’ll pay higher prices for mobile phones and laptops. Reducing unsanctioned purchases can put dollars back in your budget. Companies that require employees to purchase new devices on controlled platforms can reduce their mobile spending by 1-2%, according to data. See how Tangoe’s mobile store gives employees the freedom to choose their personal devices while putting parameters on purchases.
Mobile Security: Manual Processes Pilfer 1-2% of Spending
Security policies and controls must be continually updated with software patches and updates installed regularly. Plus, devices must be constantly monitored to enforce compliance with acceptable use policies. Companies taking on mobile security without the right automation tools stand to lose 1-2% of their annual mobile spend.
That’s why Tangoe offers unified endpoint management (UEM) software solutions surrounded by a menu of managed services aiding your IT team in building a fully integrated UEM ecosystem – not to mention 24-hour services to monitor and manage your mobile security day in and day out.
Productivity Plunged: Management Activities Take at Least 45 Minutes Each
In studying the administration of 14M mobile devices, data shows every month 5% of the fleet needs servicing, and device administration activities take at least 45 minutes on average. Ever thought about how long it takes your IT team to service those devices? Fulfilling mobile orders, making changes to services, reallocating devices to new employees, and helping users with technical support can rob your team of productivity.
Here’s a breakdown of how long each activity can take:
- 45 minutes per interaction handling mobile Help Desk calls
- 45 minutes per order, handling procurement processes and approvals
- 45 minutes per fulfillment, handling vendors, updating portals, and following up with employees
- 2 days per month per vendor managing vendor catalogs and employee device allocations and reallocations
Self-service portals can help offset these productivity hits, and industry data quantifies the benefit with an estimated value of $30 x 25% of your total employee count. Use this mobile savings guide to tally your waste and your savings potential from an investment in managed mobility services.
Cloud Crisis: 4 Ways Resources and Expenses Get Mismanaged
SaaS Setbacks: Nearly 14% of Spend Goes to Waste
Companies are notoriously over purchasing and underutilizing software, and data shows this waste increases SaaS costs per employee by 5% on average.
Other forms of waste push this number even higher.
Bulk price discounts can save companies a bundle on software, but this purchasing power is only effective when all employees use the same applications to get their work done. This is why redundant tools can poke a hole in the budget. When employees use multiple tools to accomplish the same job, it increases the SaaS cost per employee by 2% on average. Combine these two factors together and you’ve got a clear path to cutting costs by 7% per employee.
Unauthorized purchases are also a big issue, accounting for 6.5% of SaaS overspending annually. Roughly 5% of that waste comes from underutilized Shadow IT applications and 1.5% from rogue procurement activities. Add these two together, and you’ll put nearly another 7% back in your budget.
Strenuous SaaS: You’ll Need 2+ FTEs to Oversee Licenses and Security
Mismanaged cloud software costs more than just money. To handle SaaS effectively, employees must manage contracts and assign and reassign licenses during employee on-boarding and off-boarding. Plus, they must oversee SaaS applications for security and compliance purposes. Performing this work manually requires 1-2.5 full-time employees plus 60 hours per enterprise app. Want to accelerate the process? SaaS management services and license management automation tools can do the work for you in a matter of minutes.
Use this SaaS savings guide to see how much you stand to gain from Tangoe’s SaaS expense management solutions.
IaaS Indulgence: Up to 25% of Spending can be Unproductive
Cloud infrastructure has a reputation for being an IT wasteland where ad-hoc deployments run up the bill for no reason. Part of the problem is navigating purchasing decisions. Buyers are overwhelmed with an ocean of plans and SKUs to choose from, making it nearly impossible to compare options. On average, companies overspend on IaaS by 10-15% annually because they can’t identify the most cost-effective plan and path forward.
Another issue is getting charged for idle cloud resources. Companies that fail to leverage instance pausing features spend 5-10% more than necessary. Explore how Tangoe makes multi-cloud instance pausing easy.
Compile the savings potential from these two tactics, and IT and finance leaders can cut cloud costs by 15% or more.
IaaS Inefficiency: Monitoring Usage and Budgets Requires 1-2 FTEs
Financially managing IaaS is a critical part of driving expenses down and value up, but most companies are performing that financial work manually when automated tools and managed services can free their resources. Data shows companies spend 6 hours per report compiling information for departments and executing cost allocations, chargebacks or showbacks. Moreover, they need 1-2 full-time employees to:
- Monitor and track expenses and spending trends across multiple IaaS providers
- Map cloud infrastructure usage back to business units and departments
- Perform budget-to-actual comparisons and forecast spending for the future
- Avoid costs by manually governing spending and alerting to cost overruns
Tangoe’s cloud expense management platform handles these tasks automatically. Learn how a research firm turned 5–hour cloud financial reports into a 5-minute process.
Want to estimate how much time and money you could save? Use this IaaS savings guide.
Ready for a Personalized Savings Analysis?
Tangoe offers consultations that dive deep into your financial management health across cloud, mobile, and telecom technologies. You’ll walk away with action items for making tangible improvements and a customized ROI report showing you the value of an investment in Tangoe’s software and services. Interested? Email us at [email protected].