Forensic Telecommunications Auditing is Substantially More Than Checking Rates

It is important to understand the relationship between data validation and management tools, such as TEM software, accounting software or, other cost management software used to monitor ongoing expenses. To this end, we are an integral component in the frontend support of such tools in all enterprises, some of which include the following:

The full inventory of telecommunications assets of the enterprise
The rationalization of existing assets to ensure validity and use
The correlation of client and vendor data, ensuring accuracy with past configuration orders
Compliance with regulatory body and filed tariffs in each state
Compliance with vendors' contract terms and conditions, ensuring accuracy and full implementation
The resolution of local carrier USOC-level programming within the structure of client accounts

Telecommunications Expense Management (TEM) Software: Only a Tool, Not the Absolute Answer

Although we are not vendors of Telecommunications Expense Management (TEM) products, or any vendor products for that matter, we are advocates for the use of quality TEM software, or other expense management tools, for day-to-day telecom expense management within enterprises. However, these tools are only as valuable as the information entered. Once data is properly rationalized, TEM products can focus the efforts of the Telecommunications Department "more efficiently."

Tariff changes occur daily in the United States, adding additional layers of complexity for TEM-based software products. If a vendor changes rates, at any point in time, your TEM "tolerance" settings trigger, causing affected accounts to indicate prospective problems in TEM software. In the United States, most vendors have been consistently raising rates multiple times each year.

Another issue of concern, which we discussed in an earlier section of this website, relates to the non-variability of some accounts. If the account you are managing in TEM is consistently invoicing the same amount each month, it does not necessarily mean that the account is invoicing correctly, it means the account is invoicing the same amount consistently. Any account errors will continue to proliferate on an ongoing basis.

If you are unfamiliar with Telecommunications Expense Management software, you can click here, connecting to TMCnet's website. You can read an authoritative explanation of TEM and the value such software may bring to your enterprise expense management efforts (Campbell, 2011). Without properly validated data input, TEM software can become an expensive white elephant, or an investment with limited or even negative ROI. Telecommunications auditing is the essential launching point for proper TEM software investment and implementation.

A Perspective from a Past Network Management Software Developer

Most corporate IT personnel remember the company Peregrine Systems, acquired in 2005 by Hewlett Packard. The company was a stellar performer through impressive, and then much needed, IT management software development that, assisted large corporations, the world over, to manage their network assets; reducing overall network costs.

In a NetworkWorld article, written by Denise Pappalardo (2002), the reporter interviewed the Senior Vice President and CIO of Peregrine Systems, Robert Urwiler, about the exponential growth of the company, as well as some of the underlying issues relating to its accelerated acquisition growth.

Urwiler disclosed that the company's main issues were the management of 20 to 30 different telecommunications vendors associated with their acquired companies (Pappalardo, 2002, p. 1). Issues relating to pre-existing vendor contract compliance resulted in Urwiler enlisting the services of an "outside telecommunications auditor" to review the accounts; ensuring that they were receiving the discounts and pricing to which they were entitled. The auditor's work resulted in reductions exceeding 30% of Peregrine's total telecommunications expense, or over $500,000 in cost reductions. Urwiler stated that, enlisting the services of a telecommunications auditor was a "no brainer" (Pappalardo, 2002, p. 1). Furthermore, he admitted that the costs associated with staffing the necessary expertise to conduct such work internally "would have cost a fortune" (p. 1).

For a vendor, responsible for the development and sale of IT management software, the previous statements are just as much of a revelation today as they were in 2002.