Few enterprises know what they spend, on which products, or with which suppliers...

In the absence of good spend data, supply managers and business executives are forced to develop strategies and decisions based on intuition rather than actual data.

Impediments to accurate spend data include:

• incompatible data sources
• incomplete and/or inaccurate spend data
• insufficient category expertise
• inconsistent naming conventions
• limited analysis tools

In the absence of all of these, it will be difficult for any organization to understand how it spends its money or how to improve procurement practices.

Best Practices in Telecom Spend Management

The challenge: few enterprises have a detailed understanding of how much they’re spending on telecom equipment and services or with whom they are spending these dollars. The reason? Telecommunications services purchase decisions are widely decentralized and poorly controlled at most companies.

In fact, a June 2004 Aberdeen benchmark study of telecommunications spend practices of 115 enterprises uncovered the following:

• 7% to 12% of telecom service charges are in error. For large enterprises, such errors are costing more than $8 million a year in lost profits.

• Up to 85% of a typical enterprise’s telecom bills are not audited and are simply paid in full. For bills that are validated, billing analysts most often examine just a subset of invoices associated with the largest spending.

• There is a lack of insight into telecom spending. Forty-five percent of companies are actively managing less than 50% of overall telecom spending.

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