Telecom Expense Management (TEM): High-impact Technology - What You Need to Know: Definitions, Adoptions, Impact, Benefits, Maturity, Vendors

Kevin Roebuck

Description

Telecom Expense Management (TEM) is a specialty financial discipline involving the application of systematic analysis to telecom service orders, inventory, bills regarding telecom services.

This book is your ultimate resource for Telecom Expense Management (TEM). Here you will find the most up-to-date information, analysis, background and everything you need to know.

In easy to read chapters, with extensive references and links to get you to know all there is to know about Telecom Expense Management (TEM) right away, covering: Telecom Expense Management (TEM), Audit (telecommunication), Automatic Message Accounting, Average call duration, Average margin per user, Average revenue per user, Bit Stream Access, Bypass (telecommunications), Call accounting, Call detail record, Call volume (telecommunications), CardEx, Carrier Pre-Selection, Customer proprietary network information, Effects of communication technology on local communities, Fonview, Individual communication services and tariffs, Least-cost routing, Lec billing, Harvey J. Levin, Local-loop unbundling, LRIC, Mobinomics, Packet Clearing House, Postal, telegraph and telephone service, Premium-rate telephone number, Prepaid mobile phone, Prepaid telephone calls, Quadruple play, Real Time Charging, Rechargeable calling card, Revenue assurance, Sub-loop unbundling, Telecommunications billing, Telecommunications mediation, Telecommunications rating, Telecommunications tariff, Telephone card, Telephone token, Test call generator, Traffic pumping, Unbundled access, Unbundled Network Element, Wireline incumbent, Expense, Accretion expense, Bad debt, Business overhead expense disability insurance, Expense account, Expense management, Expense Ratio, Expenses versus Capital Expenditures, Freight expense, Interest expense, Momentem, Non-Cash Expense, Operating expense, Payroll, Stock option expensing, Tax expense, Total Expense Ratio

This book explains in-depth the real drivers and workings of Telecom Expense Management (TEM). It reduces the risk of your technology, time and resources investment decisions by enabling you to compare your understanding of Telecom Expense Management (TEM) with the objectivity of experienced professionals.

Sujets

• Computers
• Informatique

Informations

• Publié par: Emereo Publishing
• Date de parution: 24 octobre 2012
• Nombre de lectures: 0
• EAN13: 9781743045091
• Langue: English
• Poids de l'ouvrage: 3 Mo

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Contents

Articles Telecom Expense Management (TEM) Audit (telecommunication) Automatic Message Accounting Average call duration Average margin per user Average revenue per user Bit Stream Access Bypass (telecommunications) Call accounting Call detail record

Call volume (telecommunications) CardEx Carrier Pre-Selection Customer proprietary network information Effects of communication technology on local communities Fonview Individual communication services and tariffs Least-cost routing Lec billing Harvey J. Levin Local-loop unbundling LRIC Mobinomics Packet Clearing House Postal, telegraph and telephone service Premium-rate telephone number Prepaid mobile phone Prepaid telephone calls Quadruple play Real Time Charging Rechargeable calling card Revenue assurance Sub-loop unbundling Telecommunications billing

1 2 4 6 6 6 7 8 8 12 14 15 15 16 17 19 19 20 24 25 35 40 41 42 43 44 52 56 57 57 59 60 64 64

Telecommunications mediation Telecommunications rating Telecommunications tariff Telephone card Telephone token Test call generator Traffic pumping Unbundled access Unbundled Network Element

Wireline incumbent Expense Accretion expense Bad debt Business overhead expense disability insurance Expense account Expense management Expense Ratio Expenses versus Capital Expenditures

Freight expense

Interest expense Momentem Non-Cash Expense Operating expense Payroll Stock option expensing Tax expense Total Expense Ratio

References Article Sources and Contributors Image Sources, Licenses and Contributors

Article Licenses License

66 66 69 71 74 75 76 80 81 83 83 85 86 88 89 90 91 92 94 94 95 96 96 97 100 102 103

104 107

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Telecom Expense Management (TEM)

Telecom Expense Management (TEM)

Telecom Expense Management(TEM) is a specialty financial discipline involving the application of systematic analysis to telecom service orders, inventory, bills regarding telecom services.

Description TEM includes the following business processes: • Sourcing - of telecommunications services. In competitive markets sourcing telecommunications services can often mean acquiring proposals from a number of potential suppliers, qualifying their recommendations and choosing the winning bid. • Ordering, Provisioning and Support - telecommunications companies have extensive processes for ordering, initializing (aka provisioning) and assuring quality service operation through technical support services. • Inventory Management - involves the identification and status tracking of each telecommunications service. • Invoice Management - telecommunications service providers invoice their customers. For large enterprises this can mean tens of millions of dollars and hundreds or thousands of invoices each month. Processes to manage these commitments to pay and internally tracking these financial documents are important in avoiding expense of late payments or over-payments. • Usage Management - some services are billed on some usage basis, so the enterprise needs to track usage to be sure that the usage to be paid for is a legitimate business service request and is appropriate accounted for and approved by users. • Dispute Management - telecommunications service providers have extensive mechanisms for customers to dispute charges on their bill. This element of TEM programs require the management of these processes. • Business Intelligence - tracking overall TEM program results and reporting dispute outcomes are important to senior financial executives who typically sponsor and implement TEM programs for their business [1] organization.

References [1] Gartner Research Report #G00156381 (http://www.gartner.com) - "Cost Cutting by Telecom Expense Management Services", April 2008

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Audit (telecommunication)

Audit (telecommunication)

In telecommunications, the termaudithas the following meanings: • Telecom Audit defines the act of conducting a review, examination and reconciliation of Telecom, Wireless and Network customer service records, invoicing and contract agreements in order to ensure the accuracy of budgetary forecasting. • Independent review and examination of records and activities to assess the adequacy of system controls, to ensure compliance with established policies and operational procedures, and to recommend necessary changes in controls, policies, or procedures. • Analysis of invoices, lines, rates, tariffs, taxes, plans, usage, call volume, systems, and contracts resulting in cost reduction, proper invoicing and optimization of telecommunication systems often conducted by an independent telecommunications consultant or firm. The simplest audits merely consist of comparing current telecommunications billing and usage to other alternatives [1] based on their relative cost, security and reliability. Complex audits utilize software applications, direct bargaining [2] with service providers and activity reports that include detail down to an individual employee's usage.

Auditing Methods and Consultants In business, companies with significant telecommunications costs or a telecommunications focus normally either conduct audits internally or hire a consultant. No matter the method, typical audits encompass one or more of the following: •Telecom Expense Management(TEM):An ongoing analysis and adjustment of internal telecommunications procedures and billing designed to maximize savings. •Telecom RFP (Request For Proposals):A proposed management plan designed to maximize efficiency, security and reliability in the business' communications. Consultants typically present an RFP for approval by their clients. •Management and Reporting:Ongoing telecommunications cost and activity analytics. Internal auditors and consultants both use software as part of the process: either a generalized database application or specialized [3] applications designed for auditing. A common misconception is that a Telecom Audit only relates to the area of telecom cost, when if fact it encompasses just about every communications service that a business expends its budget on. Audits may focus on mobile phones and devices, Internet service or land line telephony, or they may encompass all [4] three. Independent telecom auditing firms are not affiliated with telecom companies that sell mobile phones and devices, [5] Internet service, long distance calling or land line telephony. They are independent and work on contingency.

Current Methods Internal Audit A business accounting department will generally only conduct a telecom bill review in the months that trigger a red flag due to the sudden spike in the expense of a communications service. This is usually contained to the one telecom service provider who triggered the red flag and the rest of the invoices are left unexamined because they fall within the considered norm of a small monthly cost increase. Contingency Fee Based Audit

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Audit (telecommunication)

Business Process Outsourcing BPO, telecom consultant companies can provide a contingency fee based independent review and examination of records and activities to assess the compliance of telecom service providers with telecommunication contracts and State and Federal Tariffs.

Critical Steps • Establishing a "Book of Business" is the first step towards telecom auditing. The Book of Business can be an Excel spreadsheet compiled manually, that details every single line item charge associated with all corporate telecom, network and wireless payables, or it can be constructed by Electronic Data Interchange (EDI) feeds using TEM (Telecom Expense Management) software. • Collect contractual agreements for each communication service that has a telecommunication agreement in place with your company. Copies of telecom service and equipment contracts can be requested from vendors if an Enterprise or Corporate HQ does not have a central library containing these legal documents. • Obtain the State and Federal Tariffs filed by each phone service provider that pertains to each local, long distance and network circuit service that connects your business to the Local Exchange Carrier (LEC) in its geographic area. • Reconcile the Book of Business, Telecom Contracts and the State and Federal Tariffs to identify any areas that can help lower a company's communications budget.

References [1] Telecom Expense Management for Regular Folks | Telecommunications Blog (http://www.gill-technologies.com/ TelecommunicationsBlog/telecom-expense-management-for-regular-folks/) [2] Telecom Auditing FAQ (http://www.telecomauditmanagement.com/Phone_Bill_Audit_FAQ.html) [3] GILL Technologies Telecom Management Software (http://www.gill-technologies.com/Telecom_Management_Software.php) [4] Telecommunications Auditing (http://www.auditelinc.com/Telecommunications_Auditing.html) [5] Independent Auditing Firms (http://www.espyservices.com) •This article incorporates public domain material from websites or documents of the General Services Administration. • National Information Systems Security Glossary

External links • Telecom Audit Education Blog (http://blog.valicomcorp.com/) • White Papers on Telecom Audit (http://www.valicomcorp.com/index.php/White-Papers.html/) • Sample Telecom Audit Reports (http://profitlinktelecom.com/ta-service-delivery.html) • Telecom Audit ROI Calculator (http://www.telapprise.com/baseline_roi.html)

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Automatic Message Accounting

Automatic Message Accounting

Automatic Message Accounting(AMA) provides detail billing for telephone calls. When Direct Distance Dialing (DDD) was introduced in the USA, message registers no longer sufficed for dialed telephone calls. The need to record the time and phone number of each long distance call was met by electromechanical data processing equipment.

Centralized AMA

In Centralized AMA (CAMA) the originating Class 5 telephone switches used Automatic number identification (ANI) and Multi-frequency (MF) to send the originating and dialed phone numbers to the Class 4 Toll Connecting office. The Class 4 office had punched tape machines to record this information on a long strip of paper the width of a hand. Each day a technician cut the paper tapes and sent them to the Accounting Center to be read and processed into phone bills. Each punch recorder was responsible for 100 trunks, and its associated Call Identity Indexer (CII) identified the trunk for an Initial Entry upon connecting the call, an Answer Entry when the called party answered, and a Disconnect Entry when the call was cleared.

AMA paper tape puncher, from a 20th century 5XB switch

In Bell System exchanges (particularly 5XB switches) information from the Marker told the Sender that the call required ANI, and stored the calling equipment number in reed relay packs in the sender. The sender used the Transverter Connector (TVC) to seize a Transverter (TV), which was a bay of a few hundred flat spring relays that controlled all AMA functions. TV looked in the AMA Translator (AMAT) that took care of these particular few thousand lines. AMAT was a rack of ferrite ring cores with cross-connect wires passing through holes of 3 x 4 inches or about a decimeter square, one wire per line. The wire was terminated on a wire wrap peg representing that particular line, and passed through a ring that represented the NNX digits of the billing number, then the M, C, D and finally Units of that number. When queried, AMAT sent a high current pulse through the wire for that particular line, inducing pulses in the appropriate rings which were amplified by a cold cathode tube amplifier and then by a relay, and sent back to the Transverter which supplied it to the Sender for transmission by ANI to the Tandem office.

In case of billing complaint, a test apparatus allowed scanning through all the lines in an office at the rate of about a hundred per minute, to find which ones were translated to a particular billing number.

Local AMA In Local AMA (LAMA) all this equipment was located at the Class 5 office. In this case, it also recorded the completion of local calls, thus obviating message registers. For detail billed calls, the punch recorded both calling and called numbers, as well as time of day. For message rate calls, only the calling number and time of day. In some electromechanical offices in the 1970s, the paper tape punch recorders were replaced by magnetic tape recorders. Most punches remained in service until the exchange switch itself was replaced by more advanced systems. Stored Program Control exchanges, having computers anyway, do not need separate AMA equipment. They sent magnetic tapes to the Accounting Center until approximately 1990, when data links took over this job.

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Automatic Message Accounting

Billing Automatic Message Format (BAF) Around the same time period, the Billing AMA Format (BAF) was developed to support the full range of local exchange carrier services. BAF is now the preferred format for all AMA data generated for processing by a LEC Revenue Accounting Office (RAO). BAF supports the complete spectrum of services and technologies, including local and network interconnection services, operator services, toll-free services, Intelligent Network database services, wireline and wireless call recording, IP addressing, and broadband data services. BAF is administered by Telcordia Technologies, with the Billing AMA Format Advisory Group (BAFAG) playing a central role in the overall approval and administration of BAF records. The BAFAG consists of subject matter experts and representatives from the Telcordia Consulting Services Business Group who review and authorize proposed BAF elements, as well as subject matter experts from AT&T, Qwest, and Verizon. [1] The BAFAG uses GR-1100,Billing Automatic Message Accounting Format (BAF) , as the document that defines the BAF recordings generated for call scenarios. It describes the possible groupings of BAF structures and modules that form BAF records, the connection between service/technology and call type, how call type and call conditions determine what structure and modules (if any) are selected for generation of a BAF record, and how the characteristics of the calling/called addresses as well as the services provided are factors in module generation.

Message Register Electromechanical pulse counters counted "Message Units" for Message Rate service lines, in Panel switches and similar exchanges installed in the early and middle 20th Century. The metering pulses were generated in a junctor circuit, at a rate set by the sender, usually one pulse every few minutes. Every month a worker wrote down the indicated number of message units, similar to a gas meter. In the middle 20th century it became customary to photograph the meters, about a hundred per film frame, for examination in comfort. Since they were only used on local calls, and most residential lines didn't pay for local calls, American message registers generally showed four digits. Despite the arrival of STD, Europe continued making and using message registers in the 1970s, designing ones that could register more than one click per second on a trunk call and display five or six digits.

External links [2] • History of Bell System AMA [3] •"Your Phone Dial Computes Your Bill", February 1949, Popular Science

References [1] http://telecom-info.telcordia.com/site-cgi/ido/docs.cgi?ID=SEARCH&DOCUMENT=GR-1100& [2] http://www.telephonetribute.com/switches_survey_chapter_11.html [3] http://books.google.com/books?id=pCQDAAAAMBAJ&pg=PA135&dq=popular+science+1949+%22Some+time+ago%22&hl=en& ei=gZjhTI-wHZGUnweD79T6Dw&sa=X&oi=book_result&ct=result&resnum=1&ved=0CCoQ6AEwAA#v=onepage&q&f=true

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Average call duration

Average call duration

In telecommunications,Average Call Duration(ACD) is a measure based on a call record (or CDR) sample to determine traffic demand and forecast call volumes, serving also as a tool for infrastructure monitoring (such as switches and cables).

Average margin per user

Average margin per user(AMPU) is one of several criteria for measuring the success of telephone companies. It is an alternative to ARPU, which focuses on revenue per unit. The central premise is that by attention to the margin produced per sold unit, not the amount of cash (revenue) earned from each customer, one can afford low volumes and still have a healthy company. High volumes can also bring a significant edge, but only until competition forces [1] prices down. Telecom analysts are traditionally highly focused on ARPU because the typical telco has had huge infrastructure costs that needs to be serviced by a considerable ARPU. Another use of AMPU in some telephone companies (in particular Telenor) is Average Minutes Per User, meaning the amount of time (measured in minutes) the average subscriber talks (or listens) in their phones. This term is also called Minutes-Of-Use or MOU.

References [1] "Forget the Renenues - Focus on Margins" (http://www.mobilein.com/Perspectives/CBOSS_Margins-1.htm),MobileIN, April 4, 2005

Average revenue per user

Average revenue per user(sometimesaverage revenue per unit) usually abbreviated toARPUis a measure used primarily by consumer communications and networking companies, defined as the total revenue divided by the number of subscribers. This term is used by companies that offer subscription services to clients for example, telephone carriers, Internet service providers, and hosts. It is a measure of the revenue generated by one customer phone, pager, etc., per unit time, typically per year or month. In mobile telephony, ARPU includes not only the revenues billed to the customer each month for usage, but also the revenue generated from incoming calls, payable within the regulatory interconnection regime. This provides the company a granular view at a per user or unit basis and allows it to track revenue sources and growth. This is a very common hooker metric There is a trend by telecommunications and Internet companies and their suppliers to sell extra services to users and a lot of the promotion that is used by these companies talks of increased ARPU for these operators. It typically manifests in the form of value-added services such as entertainment being sold to customers especially in markets where the primary service offered to the customer, such as the telephony or Internet service, is sold at a commodity rate. Method of Calculation: To calculate the ARPU, a standard time period must be defined. Most telecommunications carriers operate by the month. The total revenue generated by all units (paying subscribers or communications devices) during that period is determined. Then that figure is divided by the number of units. Because the number of units can vary from day to day, the average number of units must be calculated or estimated for a given month to [1] obtain the most accurate possible ARPU figure for that month.

6

Average revenue per user

Also related is ARPPU (Average Revenue Per Paying User) which is calculated by dividing up the revenue amongst the users who paid anything at all. This yields a figure that is significantly larger than ARPU. For example in the case of a subscription game (that has a free play version), the ARPPU, measured by accounts, is the subscription price, diluted slightly by free trials. A related (but less used) measure is AMPU, or average margin per user. ARPU is widely used by Internet Protocol television (IPTV) service providers.

References [1] http://searchtelecom.techtarget.com/sDefinition/0,,sid103_gci1273170,00.html

External links • ARPU definition at Investopedia (http://www.investopedia.com/terms/a/arpu.asp) • PC Magazine Definition (http://www.pcmag.com/encyclopedia_term/0,2542,t=ARPU&i=37990,00.asp)

Bit Stream Access

Bit Stream Accessrefers to the situation where a wireline incumbent installs a high speed access link to the customers premises (e.g., by installing ADSL equipment in the local access network) and then makes this access link available to third parties, to enable them to provide high speed services to customers. This type of access does not entail any third party access to the copper pair in the local loop. The incumbent may also provide transmission services to its competitors, using its ATM or IP network, to carry competitors' traffic from the DSLAM to a higher level in the network hierarchy where new entrants may already have a point of presence (e.g. a transit switch location). Bit-stream handover points thus can be at various levels: • Handover at DSLAM • Handover at ATM-PoP • Handover at IP level Bit Stream Access is nowadays considered a key tool for opening competition in the broadband market. It enables competitors to offer their own products to consumers even if they do not operate the local loop (the last mile). Bit stream access allows the new entrant to use the high-speed modems and other equipment provided by the incumbent and thus avoid maintenance and investments into the local loop. This affects the economics of the service and places restrictions on the type of modems that the customer of the new entrant can buy or rent. The main elements defining Bit Stream Access are the following: • High speed access link to the customer premises (end user part) provided by the incumbent and transmission capacity for broadband data in both direction enabling new entrants to offer their own, value-added services to end users; • New entrants have the possibility to differentiate their services by altering technical characteristics and/or the use of their own network; Thus, Bit Stream Access is a wholesale product consisting of the access (typically ADSL) and“backhaul”services of the (data) backbone network (ATM, IP backbone).

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