10 key points and reasons why the EMEA region differs from the US Telecom Expense Management market
I was recently talking to a Chief Procurement Officer at one of our worldwide clients [I love this CPO, as he always wants to learn more about how Telecom Expense Management solutions work and he understands why a managed service is better than a basic platform]. In the course of our conversation, he asked me an interesting question: ‘Why do all of the world’s largest Telecom Expense Management companies come from the US?’
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I explained to the client that the US TEM market is much more mature than the European market and that whilst TEM is a ‘must have’ for large corporate global businesses to keep control of the costs and their communications estate, it’s evolved this way because some of the world’s largest companies are based the US.
He then asked this key follow up question, ‘So, why in the past when we’ve engaged with the top three TEM vendors, have we had such poor results?’ He went on to describe a series of difficult relationships with some of the top US TEM vendors; one even ended in a legal battle because promises made were not fulfilled on the mobile side of the solution, in the client’s European operation.
The client went on to mention that they were pleased with the savings and results achieved in the US and Canadian regions that previous TEM partners made and that the vendors had made some significant savings on their fixed and network contracts, so it was not all bad news. The client became true advocate of TEM, despite the issues with the EMEA element of savings, optimsation and reporting which remained frustrating until he engaged A&B Groep.
The scenario that he described with his previous TEM suppliers is not new to me. This issue with EMEA capabilities is a common issue with most global TEM projects. Typically, large organisations choose large TEM providers, in the sincere belief that they will be best served by a large, corporate TEM vendor. Clients take it for granted that the TEM vendor’s success must be based on their ability and size.
Dig deeper – ask the right questions
But when clients dig deeper and ask the correct questions of their chosen corporate TEM vendor, they may find that there are issues when it comes to analysis of their EMEA communications costs. It’s always a good idea to ask your potential vendor questions like, ‘How many readers for carrier portals do you have in Europe?’ and ‘Do you carry out the auditing yourselves or do you outsource this work?’ – at which point, the solution from the large corporate US based TEM provider might start to unravel..
Here at A&B Groep, we actually support many of the large corporate and US based TEM vendors in this situation behind the scenes, using our 16 years of experience in the EMEA market. We currently hold a carrier reader base of over 150 across Europe, for example.
10 reasons why the EMEA market differs from the US
For any global business that is considering implementation of TEM across their estate, here are some key points and reasons why the EMEA region differs from the US market:
Complexity: the complexity of the European telecoms market makes it very different to the US.
Language: In Europe we have so many countries and 20 plus languages and over 200 carriers.
Cultural differences: it’s important to support & understand cultural differences when dealing with people from different regions – US based corporate TEM suppliers may not have a strong grasp of European geography, time zones, and cultural and political differences.
Data protection: in some countries, data cannot leave that country or region under local data privacy laws. Therefore, sending personal data offshore for analysis can be a political and legal issue – workarounds are often put into place but are not always ideal in practice.
Decentralisation: in general, European branches of multinational companies have each their own responsibilities and hierarchy. For example, I have a client with headquarters in Denmark, that has over 50 branches in other countries around Europe and they’ve just acquired a large company in the US. My client needs an experienced international partner to manage their global communications spend and estate, with all of the complexity that they have in their organisation.
Vendor issues: telecom vendors give the impression that they’re global but in Europe, each vendor has their local processes and each European country also has their own rules and laws - in all cases, the vendors partner with other carriers in an attempt to offer global coverage.
To further explain the complexity that this brings and why there are always so many invoice errors to deal with (that run into billions being incorrectly charged to clients), I will share some more reasons and examples below.
US TEM suppliers don’t recognise that there are several large (globally operating) telecom vendors in Europe - for example Vodafone, Telefonica, Orange etc. However in practice, they are in fact just local vendors, operating under a commercial brand. For example, Vodafone in The Netherlands is a separate company from Vodafone Spain.
In this particular scenario, the billing system of Vodafone Netherlands is different to the one that Vodafone Spain or Germany is using. So the result is that data received by a TEM provider from European country A differs from European country B – even though the data has been provided under the Vodafone brand.
Rate structures: rate structures vary by region and country, which US based corporate TEM suppliers may not be familiar with.
Outsourcing: outsourcing TEM in US based companies is pretty common. In Europe, TEM is barely established. Leading carrier vendors in Europe do also present themselves as ‘TEM providers’ (for example VGE or Vodafone Global Enterprise to give them their full name). Therefore the willingness of these vendors to cooperate with specialist TEM companies is limited. This does not benefit clients that are trying to control communications costs. In addition, the common processes that TEM providers use (LOAs /EDI) in the US are not well known processes in Europe.
Roaming charges: while roaming charges will no longer apply in 2017, roaming will still exist for non-members of the EU, like Switzerland, Norway and many others in EMEA. The fact that roaming costs will be removed shortly won’t change anything though. Even if the roaming costs are charged the same as national traffic, you still need to take ‘roundings’ into account. The complexity of this market won’t change that fast in my opinion. The regulations will only be applicable for EU roaming tariffs for example. The complexity for calls and data usage from EU to the rest of World and vice versa won’t change and is still a huge cost driver. One of the main reasons for multinationals to choose TEM support is the complexity of the invoicing process with regard to mobile services in the EMEA region. Each country has multiple vendors with multiple tariff plans. And each vendor applies their own ‘roundings’, which apply to roaming voice and data services. TEM suppliers need to be very experienced in this particular field and in this particular market in order to provide decent invoice checks; a field in which A&B Groep has proven experience.
Invoicing: so many clients get flustered and frustrated each month when invoicing becomes a battle to rectify billing and charges; this results in a bad relationship with the vendor and clients unknowingly move to another vendor when they perceive that their current provider is making a mess of their account and giving an indifferent service.
But troubles escalate again within months of moving to a new provider, as the global comms estate soon runs into the same old problems. And so the pain starts all over again. In defense of the vendor, this is a headache and costly problem for them too.
The voice of experience
At A&B Groep, we also offer services to mobile carrier vendors that want to perform better in terms of billing and give better service to their clients. Some might see this as costly to the vendors but in the long-term it’s not, as they retain their clients if they bill correctly and they retain global contracts if they get the billing and charges ‘right’ for their clients.
Whilst a good, solid and reliable platform is important for client reporting requirements and the management of the communication estate, this only equates to around 30% of most global TEM solutions.
What is TEM really made of
The majority of TEM work actually lies in auditing, benchmarking and on the optimisation side. No TEM provider can do this properly without local experience, language specialism, the right contacts and knowledge. To use a car analogy, would you take your Bugatti to a Ford dealership, just because it’s bigger? Of course, you wouldn’t. So why go to the US when you have a European problem that needs to be solved? It’s often said that size doesn’t matter and in the case of TEM providers, I have to agree!
I hope that in sharing this post, it’s explained some of the complex issues and why it’s a smarter move to choose an established EMEA TEM partner where the difficulty and complexity lies for clients with a global communications estate. For us at A&B Groep, the US market is a piece of cake, after building our business in the highly complex EMEA space - the hardest market there is.
In our next post, we will share examples of savings that we have made for existing clients (over 50% of their communications costs in some cases) and how we did it.
Read also the following article:
Please note: erroneous invoices, a frequently occurring phenomenon. It also happens to you!.... Click and read here;
About A&B Groep:
Our company was founded in 1999 is now firmly established as the leading global Telecom Expense Management auditing and benchmarking business on a global scale. A&B Groep actively supports over 500 clients by optimising their local and international communications estates; enabling cost reduction and visibility, control, security and reporting capability. A&B Groep is official IBM Telecom Expense Management Auditing & Sourcing partner for the entire EMEA region. A&B Groep Clients include IBM, Rabobank Group, AkzoNobel, DSV, Cargill, Delphi, Fluor, A.S. Watson Group, Flowserve. www.ab-groep.nl