MBG Article

Turning Data Into an Asset

In today’s business environment, there is plenty of data, but it is often more difficult to make that data effective. In fact, you could paraphrase the famous quote to say:

"Data, data everywhere, but no decisions can be made…”

The key is to take that data and change it into information that is applicable to your business. The next step is to take that information and change it into knowledge that can impact your business.

Data

The start is to take all the appropriate information for you business and put that information in one location. For telecom expense management, the key is to take all the information from your telecom vendors and their associated services and put them in a standardized, central data repository.

Without this type of single repository, different areas of the organization will put their own data sources together. These data sources may have different focuses and different formats. For example, Finance and Network may assemble their own data repositories. While these repositories have the goal to present the same information, each department will put their own “spin” on the data and emphasis on the data.

For example, Finance may not care as much about the usage associated with telecom activity. Their focus will be more on the immediate import and presentation of financial related information. Conversely, the Network department will have a focus on the usage and not necessarily on the financial aspects.

When this “single version of the truth” is created, each department will have the same data and will avoid having different numbers when compared.

Information

When all the data is assembled into a single repository, the next step is to transform the data into information that relates to the business. This can take the form of standard reports and metrics. Here are some examples:

Standard reports

All traffic from a single vendor
Total dollars spend on a single location
All traffic from a single circuit

Standard Metrics

Average cost per month per location
Cost per month per circuit

All of these reports and these metrics represent a particular aspect of the business and provide information relating to how “business is done”. Also, since all of them are based on the same data repository they represent an even greater value to the organization since they all come from that “single version of the truth”.

This is important in terms of not only providing valuable insight to the various departments who need the information. This information is also consistent across the enterprise and supports the types of processes dictated by corporate governance drivers like Sarbanes Oxley and other initiatives.

Knowledge

The next step beyond the ability to have standard reporting and metrics that provide visibility into a company’s telecom expenses is the ability to have that information transform into knowledge that can directly impact the business. That transformation from information into knowledge usually comes with the addition of a particular perspective – a perspective that is specific to a particular organization. Here are some examples of how that can occur.

An upcoming vendor contract is coming up for renegotiation. Some questions that should be asked are:

Is the current company-wide usage nearing a new pricing plateau that will lower overall pricing per unit?
Is the company-wide usage so low that it may be costing the company money to use that particular vendor in comparison to other vendors?

Armed with the information from the standard reports the contract/legal department can negotiate from a position of relative strength to lower costs or to develop better relationship with a smaller number of vendors.

Another situation would be when a location or a series of locations are consolidated/closed due to merger and/or acquisition activity. After those locations are closed, a series of standard reports can show the charges and/or usage associated with those locations. Theoretically, those charges and usage should be zero as the location is closed. However, if the cancellation of those circuits was incorrectly handled by the vendor; there may still be charges associated. Assuming that a circuit roughly costs $10,000 per month and it may take six months for these type of situation to be corrected by the vendor, this represents approximately $60,000 depending on when the situation is identified and how the company calculates the net present value of the savings.

Conclusion

In the area of telecom expense management, with more and more data sources; it is becoming more important to pull the appropriate knowledge from that data to impact the business. This knowledge can be used to improve competitive advantage via dealing with few vendor or better relations with those vendors. This knowledge can also be used to lower costs associated with unused assets.