Why One National Restaurant Chain Chose a Telecom Expense Management Solution

Telecom sourcing and procurement is especially challenging for multi-location businesses due to the wide variety of billing formats, complex market offerings and technical expertise needed to fully manage these environments. Outsourcing has become an increasingly popular strategy used by such businesses to meet these unique challenges. Recently, a national restaurant chain with over 1,000 locations facing these challenges undertook the selection process to find an appropriate vendor solution.

The company sought a solution that could support its expanding footprint and add greater visibility and simplicity to its expense management processes. Blue Hill took notice because of this company’s due diligence in choosing the most appropriate technical and service-based solution for its needs—including the need for utilities expense management.

Like many fast-growing, multi-location businesses, it had to deal with quickly setting up and managing store infrastructure and services, including phone lines, network circuits, and other telecom and network services, as it rapidly added locations.

Based on Blue Hill’s experience, it is common for complex spend category responsibilities to be spread across numerous departments. This leading restaurant chain was no different in that the accounts payable department processed its telecom invoices, which were then sent to the IT department. IT then reviewed the largely paper-based invoices and set codes and cross-billing designations that were then sent to accounting. Lastly, the accounting department managed accruals associated with these services and then sent the invoices to accounts payable to be processed.

Because of this complexity, the company’s IT department identified telecom sourcing and procurement as an area to gain efficiencies. However, according to the company’s Chief Accounting Officer, telecom outsourcing became a top priority at the end of 2013 when the time and effort to dispute previously terminated services became too costly and untenable. At this point, the company began to seek vendors to manage its telecom expense environment.

As an Oracle (News - Alert) ERP shop, this company sought a telecom expense management (TEM) solution that would integrate easily and seamlessly with its ERP system. To validate technical claims and service capabilities, this business also required references that could offer real experiences into the TEM implementation process. Additionally—and importantly—the restaurant chain sought a partner that could also bundle utility expense management with TEM deployment.

Because the TEM market includes a mix of stand-alone managed services providers, software providers and consulting services from larger outsourcers—among others—all offering so-called “telecom expense management,” it is important to decide on a specific approach before beginning the vendor selection process. Otherwise, companies can quickly get into a situation where prices, services, and tradeoffs make a direct comparison nearly impossible.

This restaurant chain focused its selection decision on three top vendors in the TEM industry: Cass Information Systems, Dimension Data (News - Alert) and Tangoe. The company ruled out Tangoe fairly quickly mostly because its references were globally focused and less relevant to the North American company’s challenges. The two remaining vendors, Dimension Data and Cass, both provided strong presentations and TEM capabilities. Both vendors also demonstrated technical and subject matter expertise, and both were backed by a long, successful track record.

However, because Cass was seen as easier to use by the IT stakeholder team, perceived to be more responsive from a service perspective (a point frequently brought up by its references) and could demonstrate its capabilities to manage utility expenses outside of telecom, this publicly traded company ended up choosing Cass after a competitive evaluation.

Notably, the positive references that Cass provided in the evaluation process proved accurate, including the ability to fully implement within a 60-day period and to quickly integrate with an Oracle ERP implementation. Since this company started using Cass in a production environment, it has gained much greater visibility in areas such as inventory, pricing and contract alignment alerts.

Ultimately, the firm’s decision-making process highlights a variety of critical traits for enterprise technology evaluations, and it provides key lessons for similar restaurant and retail chains. First, the firm had multiple stakeholders associated with its telecom expenses, ranging from accounting to accounts payable to information technology. In today’s enterprise technology world, it is important to tie together relevant financial, technical and operational stakeholders associated with each technology, and then ensure that these stakeholders work together.

Equally important, the executive champion understood the key pain points that this technology solution would solve. Because the Chief Accounting Officer saw the business value in fixing key challenges of accruing telecom bills, gaining contract and inventory visibility, and disputing carrier invoices, the firm was in a better position to push this solution selection forward.

Based on this decision-making process and Blue Hill’s experience in supporting enterprise applications selections across a variety of telecom and financial operations markets, organizations should account for the following key considerations when selecting a telecom expense management solution:

• Identify the right delivery method to ensure you are considering the correct family of vendors;
• Look beyond the “upper right quadrant”— companies touted as large players in the industry based on revenue and specific features—and pursue companies that truly have the best cultural and technical fit with your organization;
• Conduct due diligence on key evaluation traits with end user inquiries;
• Evaluate customer service on multiple levels, including quality, timeliness, and rapid response

Through these best practices, companies choosing a TEM solution will be better positioned to identify key challenges and decision points, select an appropriate set of vendors for evaluation, and find the right solution to meet both initial needs and the needs that emerge during the evaluation process.

About the Author: Hyoun Park (News - Alert) is the Chief Research Officer of Blue Hill Research, where he oversees day-to-day research operations, delivery and methodology focused on vendor and technology selection. In addition, Park covers analytics and enterprise mobility technologies as a noted advisor, social influencer, and practitioner.