The CFO’s Role in Telecom Expense Management

Author: Kevin Donoghue

Telecom sits among the top four largest expenses for the enterprise. Large budgets for telecom usually contain opportunities for cost control and optimization.

Decentralized purchase decisions and limited oversight of these expenses can result in spending 10%-25% more than you need to on telecom expenses. Breakdowns in internal processes present yet another challenge in managing telecom expenses. Organizations rarely have effective systems for recording telecom contracts, service order move, add, change, and disconnect (MACD) activity, bill validation, and detailed expense reporting.

CFOs should ensure that IT and procurement work to centralize management of telecom expenses, leveraging economies of scale for purchasing decisions, procurement processes, and the operational costs to manage these expenses.

•TEM improves the bottom line with a positive return on investment.
•Having the CFO engaged ensures more favorable results when negotiating large audit refunds with telecom carriers.
•TEM helps CFOs exercise oversight and improve accountability with expense charge-backs to business units for consumption of services.
•TEM delivers with reporting on operating expenses by division, region, business unit, and employee.
•TEM aligns with Section 404 of the Sarbanes-Oxley (SOX) Act that requires CEOs and CFOs of publicly traded companies personally attest to the adequacy of their internal controls.

CFOs often push the enterprise to focus on cost cutting. CFOs play a central role in performing apples-to-apples financial comparisons of TEM suppliers. And, once the solution is selected, CFOs can help to expedite the project by clearing obstacles in locating information sources. Also, CFOs can help set the standards for dashboard reporting to monitor savings results.

It’s up to you to manage business transformation. This requires changes in core processes related to strategic sourcing, service order management, invoice processing, expense validation, optimization, allocation charge backs, usage management, and reporting.