Those smartphone users have different usage patterns than what the mobile operators were used to. They send mail and read news on their phones. They download games, full length videos and music content. To stay in contact, they use instant messenger applications like WhatsApp to send free messages to their friends. And use VoIP (voice-over-IP) applications like Skype to make voice or even video calls. The operators’ subscription packages were structured around voice and sms traffic, but all these smartphone applications make use of the cheap internet connection only.

The mobile operators are investing large amounts on expanding their networks to cater for this growing data traffic need of their subscribers, but the subscribers were paying less and less for the subscriptions and only making heavy use of the data connection. The next natural step? The big three mobile providers in the Netherlands started talking about and/or slowly implementing ways to block certain types of data traffic. Or if they could not block it, force the users to pay more for the privilege to use those services. However, political outcry put an end to these ideas. The new telecoms law introduced a new concept called net equality and prohibits the operators from asking differential prices for different types of data.

It is adapt or die time for the operators and one by one they are now introducing new price structures. In much the same fashion as we saw the introduction of sms bundles when operators were loosing revenue in the voice area, they are now starting to talk about data bundles to recover from lost revenue in the voice and sms area. A €10 unlimited internet subscription seems to be an endangered species. Smaller, slower and cheaper data bundles were introduced in the lower end of the market. The current unlimited high speed data connections can still be bought for the high end, video downloading and file sharing users, but at a rather staggering price point.

There are questions being raised though; none of the operators are very open with sharing information about how much data really is consumed by the users. No-one is entirely sure how big a data bundle they should be buying when they upgrade their subscriptions again. The consumer should not trust the operators to decide which data bundle fits their usage pattern when the same operator is not forthcoming with accurate usage statistics. It is early days; and the operators will have to come to the party at some stage.

The consumer / smartphone user is not entirely at the mercy of the operators though. Smartphones have more processing power than most home computers had only 4 or 5 years ago. They can be used to measure and process call and data usage information. There are some applications that private smartphone users can install on their own phones for this purpose.

However, in the corporate and enterprise space, there is an opportunity in this market for accurate usage measurements and billing estimates. This opportunity is called Real-Time Telecoms Expense management. In a future post, I will explore this opportunity a little bit more.

Mobile statistics worldwide

Here is a little comparison between trust in the good ol’ days & the way trust works today, just so we have some real world concepts to hang our thoughts on:
When my grandparents still had a farm & grandpa went to the bank, the bank manager would know grandpa & therefore he was allowed to do business. Trust was based on well established knowledge.

Today, I carry an identity card with me in my wallet. When I go to the bank or hospital, they look at my ID card to determine who I am. They don’t trust me because of any knowledge about me; they trust the organization that issued me with the card.

In the computer world, we also have some good ol’ days:

Single Sign-On (SSO)
You have probably used SSO a lot on your office computer without ever thinking about it.  You switch on the computer & it asks you for your name & your password. Windows asks some system in the office environment whether you should be allowed to login (it is called the domain server) & gives you access to the computer.  Then you open your email and it just works without asking you for another password.  That is because some SSO system is in operation that tells your mail who you are.  The same happens when you access your office file server and print to the office printer down the hall.

An identity provider is the one you login first (for example, that domain server) and is the one that knows who you are and what you are allowed to do; like grandpa’s bank manager.

A service provider supplies the thing you use next, for example the office file server or printer. This is grandpa’s bank. Or a website on your intranet. Or, and this is the point of this discussion, a website on the internet.

Moving to the modern time:

Security Assertion Markup Language (SAML)
This is a standard XML message format that is used to transfer identity information about a user between an identity provider and a service provider; and this is like my ID card, except that I get a new one for every time I want to do business.

The SAML message contains information about you, called identity claims. It also has some additional security information about the message itself, which helps us determine whether the message really came from your identity provider and whether anybody fiddled with the claims after it was sent.  This feature keeps everybody out of the system that pretends to be you, because we don’t have your bank manager around to ask whether it is really you.

Federated SSO
This adds all of this together.  You login to the company network at your office; at your identity provider.  Then you browse to our website. Your identity provider forwards your identity in a SAML message to us, the service provider.  We look at your ID and give you access to our services, not because we know you per se, but because we trust the identity provider that sent us a copy of your ID.
It is a bit more complex than that though, sorry, but those are the concepts.  On a technical level, it works more like this:

• you open our login URL in your browser
• we redirect your browser with the URL of your identity provider
• you login at your own identity provider, or if you are already logged in, you skip this step
• your identity provider redirects your browser back to the URL of us (the service provider) with your identity nicely wrapped up in a secure SAML message.
• we open the SAML message & give you access to our services, based on the identity claims.

SO, why does this matter?  Well, if your company implements the identity provider side, Federated SSO will remove the need for you to remember yet another set of login credentials for Ezwim Expense Management by giving you access to our services in a secure and robustly authenticated way, directly from your intranet.  For example, Federated Single sign-on allows EEM to be integrated with a client’s Active Directory Federation Services or ADFS (which is the Microsoft solution for Federated Single Sign On).

While the smart phone market growth has so far mainly been driven by the high-end segment, the market is now reaching a tipping point where the mid-level makes up a growing proportion of that growth. Smart phones are becoming the standard!

The specifics of the Vodafone deal were not announced. Combined, Gartner estimates that the two acquired TEM companies generate under US$25M in revenue. Based on the estimated 2009 revenue of the acquired companies, their trended growth over the past 36 months as well as considering comparable TEM acquisitions; Gartner estimates that the two companies were likely acquired by Vodafone for less than US$40 million. TnT has appx 85, and Quickcomm 35 staff.

TMT Ventures announced the acquisition of Ezwim this week. TMT Ventures is an investor consortium in Telecommunications, Media & Technology, that intends to expand Ezwim’s business globally. For more information about this acquisition check out the press release.

The acquisitions made by Vodafone pose the question if a strategic buyer like Vodafone, in particular an operator, is a likely exit route for TEM players. On the one hand, the answer is evident as an operator like Vodafone has substantial cross-sell opportunities and can leverage the typical TEM product suite well. The counter argument is equally evident; why would it be in the interest of an operator to help decrease customers’ ARPU, and why would customers appreciate having an operator as TEM provider.

My view as a recent entry into the TEM market, is that it is increasingly likely for an operator to offer TEM services as part of their core portfolio. If anything, it should increase customer loyalty and provide differentiation to the typical operator portfolio that is otherwise quite homogeneous.

From a customer perspective, the recent acquisitions demonstrate the importance of telecom expense management tools for large customers to control telecom costs across the enterprise footprint. Enterprises are facing increased telecom spend as mobile data and personal usage costs are growing and employees are becoming more mobile and are using advanced mobile devices and services. They require increased visibility into, and control over their mobile and fixed communication assets and costs. In addition, customers, in particular in the multi-national space, tend to favor the ‘one throat to choke’ argument.

The timing of the Vodafone acquisitions has surprised investors as the market for TEM services is rapidly developing with many new and exciting products, and customer adaptation seems to recently (as in this year) has progressed into a mainstream service, at least here in Europe.

If it is the right exit route for TEM players in the long run, time will tell.

Increased productivity, improved efficiency and response times are some of the important benefits of wireless solutions. But to ensure cost control and security a formal mobility policy is crucial for any organization.

To ensure that policies will be effective, consider the following tips:

Policies should never be written in isolation, the people who are asked to use or enforce them may have differing opinions. A sole policy writer may also neglect things that are important to others. This is not to be taken lightly: enterprises need to get the right people involved, and should include as many people and groups as is practical.

Consider a usage policy per user group, enterprises should focus first on the target audience for mobile solutions, and second on what are the most appropriate and beneficial applications to a particular user group. The following three questions for mobility are important:

1. Who should have a device?
2. What applications should be mobilized?
3. What device platforms should be mobilized?

Insight into employee user costs, make sure you have insight into telecom costs across the organization and have the possibility to track policy compliance. Insight into telecom costs is not only important for management but also for individuals to be aware of their personal costs as it significantly raises cost awareness.

Management buy-in, management should enforce and buy into policies or the implementation of them may be adversely affected. Managers should be careful not to use their own handheld devices in ways that contravene policies, and they should demonstrate that adhering to policies is an issue they take seriously.

After you have defined a wireless policy, the implementation can start and in this phase it is crucial that employees know the policy and understand it. Training on the policy should also be part of the new hires’ orientation and periodic newsletters, workshops, or seminars can help explain the policy.

After employees are informed and can expect to comply to the corporate policies the organization should have the tooling in place to track policy compliance. Telecom Expense Management services are useful as they do not only help to gain insight into telecom costs it also helps to automate policy compliance through the implementation of business rules.
Mobile technology is rapidly changing therefore it is especially important to review and update the telecom policy every 12 months.

For more information also check out our webinar slides on developing an effective mobile policy

Shocking results!

These results provide important insights into the real-world experiences of mobile customers. Operators can do much more than they are currently doing to help customers avoid unexpected fees.

In Europe (European Union) mobile data roaming will be cut off at €50 and users will receive a warning when they reach 80% of the chosen limit. These measures were taken after enormous media exposure to “Bill Shocks” with a German traveler running up a €46.000 bill while downloading a movie in France. The typical operator response has been “tough luck” and please pay your bill as the operator has to pay the roaming operator. The EU has also taken an active role in regulating and reducing the cost of mobile voice and texting while in roaming, and addressing operator practices of “per minute billing” and “start fees”. More info at http://europa.eu/rapid/pressReleasesAction.do?reference=IP/10/215

The European reality has been that the cost of mobile roaming or international calls has moved away from the EU to North America, Middle East, India and China (See Ezwim Telecom Monitor, http://www.ezwim.com/news/ezwim-telecom-monitor-2008 ). So the question becomes what can operators or regulators do beyond the EU border? The EU could consider to have this topic included as part of their bi-lateral trade agreements or through the WTO (The world is flat…isn’t it?), and nothing stops operators to have a “cap” or “cut off” mechanism in non EU countries . Technically this is a matter of treating post-paid subscribers as if they were “pre-paid” subscribers when in roaming, this forces all calls to contact the home operator (HLR/VLR) and allows for setting a “wallet” against this service.

The research is about consumers, not businesses. However businesses generally have multiple service providers and contracts in multiple regions so the risk of experiencing Bill Shock is even higher than for customers. The highest shock bill we have seen at Ezwim was €32.000 when one of our clients was using Skype for calls (and listening to radio) while being Bahrain. Mobile data cost ~€5 per MB in Bahrain and Skype uses around 55 kB/sec.

This reality demonstrates the need for Telecom Management solutions; systematically and proactively managing telecom will almost certainly lead to more control on telecom costs and better services. It also shows the need for integrating Telecom Management solutions, like Ezwim, with Mobile Device Management (MDM) solutions…..MDM provides the ability for real time call and data logging, Ezwim can use this data for real time forecasting or calculating the cost per call or data session.

This is a blog, so I’ll do my best to get to the point (sorry I am Latin and it is not our forte). My experience is that the challenge is often times the client itself and the battles within their organizations. Also, the large TEM providers recognized the money in the Fortune Sector, and the software is mostly adapted to the huge US sizes, complexities and expectations. However, the world of such companies and many smaller companies is built on years of “geographical and class segregation” across entities and divisions to the point that they look like the European Community, supposedly united but with multiple countries each doing their thing, with their own budgets, mindsets, emergencies, issues, controls and priorities; which happen not to be those of the European Council.

So, uniting a global corporation under the umbrella of “global TEM” requires in my humble opinion a very unique process and methodology. I can speak to this because we have spent 3 years developing such methodology and have had the unique opportunity to reflect and practice much of what I predicate on:

• Global but fragmented – and rebellious
• Nice objective — but please politics and medals are first I decide, but you have to pay for it!

The next wave of global TEM is from Complexity to Simplicity: A large global firm recently made a choice to move from the “Cadillac” to the “Camry deluxe”. I call it the “Cadillac” ( no offense intended) because it has too many , generally useless, features and too many buttons for the poor folks that need to use them.

One of my beloved clients – Applica Consumer Products (owns Black and Decker and other brands) even has been migrated by us to the “Camry”. And is happy enough with the weekly report providing a dashboard of all activity, budget, processed stuff and status of things and don’t even play with the software. Why? Simple. They don’t have the time. Please Hide all the bells and whistles. They look fantastic on the webex tm until you have to fill all of them daily yourselves with largely useless information as far a savings , visibility and control is concerned. SIMPLE please!

Mobile versus fixed: On a global scale, save a few companies, the vast majority of companies have a good grasp on their fixed assets, and more and more mobile services account for a larger portion and represents a more complex management challenge for its inherent type of service. Random subscriptions, employee dynamic, user facing services, etc. So mobile is the priority for “application based services with BASIC fixed line management”

Global versus local: the key word here is shared services. The methodology we have thought out seeks to service at the same time Local, Regional and Global management simultaneously, and providing to each one or obtaining from each one what is required. If this is not accomplished like this, sponsorship and success to the adoption are a nightmare at best. A formula must be worked out so each country can do their thing and corporate/headquarter also benefits.

I worked as consultant to a Fortune 50 I won’t name for confidentiality reasons but mostly to save them the embarrassment. After countless meetings at corporate in USA and RFI and RFP and interviews with everyone, they take us to their Latin-American HQ. Surprise , surprise, the Latin-American HQ says: “Well, corporate needs this as they are complex and a mess, but we here know exactly where we stand. We would love to do the cell phones in the region but:

• we don’t have “one person”. In charge . Responsibility is spread across business units
• is corporate paying for this? I don’t have budget
• so on..

In summary, to succeed at a global implementation:

Keep it simple, with simple applications with global ability; Make sure you acquire or develop predefined methodologies for collecting initially and aggregating all data about infrastructure, processes , expenses, providers, and users within company so you can inventory your multiple processes and other factors affecting expectations; Methodology for inserting AND SHARING services within a CORPORATION; Plan for actionable data and being willing to act and assimilate the consequences of findings; Track, measure and report everything you find and fix from day ONE.

There is a lot of talk about Mobile Device Management (MDM) and its big promise to enterprises of centrally distributing applications, data and configuration settings to mobile devices. MDM services have incredible potential and deliver great value to IT department as it provides centralized application and hardware resource control. The control is effected by remote or over-the-air capabilities. It helps IT departments to optimize functionality and security and minimize (support) cost and downtime.

So yes it provides great value but does this all sound too good to be true? To a certain extend it does as there are some important “challenges”  to overcome before MDM will be ready for mass market adoption. The current high Total Cost of Ownership being a very important one, as enterprises will be hesitant to pay a high monthly cost per user/device. Also the user Experience is not always positive…..battery drains, difficult to set-up, device locks,…etc. And what about keeping up with the ever changing landscape of Device Operating Systems and Device (Configurations).

It will take time and hard work from many market players to overcome the challenges, also because the MDM market is still relatively untested and uneducated..  For the near future I expect Telecom Expense Management (TEM) Services to be combined with MDM. It will provide a powerful combination and provides strong value to IT department as it finally offers:

• Real time cost control – enabling controlling costs when they are actually made –
• Policy management…..e.g. block 0800 service numbers, this roaming call cost $4.25, automatic selection of preferred network, white and black list of applications etc.
• Fully automated Asset and Inventory Management and more real-time insight…..which user is using how much mobile data with which application, what are the most used applications.

Over time TEM and MDM will be an integrated offer and provides a powerful combination making life easier for enterprise IT departments to control cost and improve service management.

Recent research shows that two in three European companies have no clue what and how much corporate data is housed on employees’ mobile devices. Of those surveyed, two in three companies said they are not fully aware of exactly what sensitive data is stored on employees’ mobile devices and—perhaps more troubling—38 percent said they don’t even know what applications are being run by employees on their smartphones. Moreover, only 15 percent of respondents said that they are “completely confident” that they would be legally protected should an employee’s mobile device be lost or stolen and whatever data contained on the device fell in the wrong person’s or organization’s hands.

Troubling figures…. Smartphones keep employees connected to their work however from a security standpoint, this disconnect poses significant problems for companies that are torn between empowering their employees and locking down the sensitive data they must exchange to do their jobs. In addition to the corporate data there is a lot of valuable personal data on the employee mobile device (pictures, videos, applications, ringtones, personal address book,..) as lines have blurred between the professional and personal life. Employees will back-up this data locally on their computer or somewhere in the “cloud”, posing an even more challenging situation from a security standpoint. Throw in the mix the adoption of (mobile) applications, with the Apple Appstore leading the way in the enterprise/professional world, and the cost of transmission not being free (at best fair usage or roaming fees)….the situation becomes even more critical to resolve. Ignoring the challenge is not an option for most enterprises.

How to deal with this situation?

One could take a classical Strategy Planning Process and move in a top-down approach from objectives, situation analysis all the way to implementation and control. Personally I would go first for a quick-and-dirty baseline bottom-up assessment by using Mobile Device Management (MDM) tools to make an inventory of device-side data, applications being used, which data is being stored outside of the enterprise domain, and trying to investigate/understand (surveys) end user behavior/needs/trends. This data allows for insight on adoption within the enterprise, risk analysis, and future direction and needs. From this point on one can be an informed decision on what to do next and how to do it…….

Comprehensive telecom expense management (TEM) solutions have been shown to be highly effective in reducing telecom costs, generating strong ROI and paying for themselves in less than one year of operation. An automated invoice management system will generate hard dollar savings and productivity gains.

The value of reviewing invoices for accuracy before paying them is easy to appreciate. But for organizations that receive hundreds or thousands of telecom invoices every month, manually validating every charge on every invoice is a time-consuming and costly process. Whether deployed as an on-premise or outsourced solution, an effective TEM invoice management program includes four essential components: electronic invoice processing, invoice validation, dispute management, and contract negotiation.

Electronic invoice processing

Invoice management solutions are effective to the degree that the data is made available in electronic form. Invoices received in electronic form can be processed more rapidly, accurately, and at lower cost than paper invoices. Electronic invoices can also provide levels of detail that are critical for thorough and accurate analysis, validation, and allocation.

Invoice validation

To fully verify the accuracy of invoices, charges must be validated against three criteria:

• Usage – Were the services billed for actually consumed? Call accounting systems collect Call Detail Record (CDR) data off the telecom switch that can be used to validate costs. Wireless services do not provide this kind of activity log and are typically validated against charge thresholds.
• Contract terms and company policies – Rates applied to delivered services, as well as taxes and other charges, should be validated against terms defined in the carrier contract. Charged activity should also be checked against company policies governing appropriate use.
• Inventory and MACDs – The inventory of services in effect and the technology deployed are constantly changing. Invoices from telecom providers must be validated against what is essentially a moving target.

Dispute management

An automated dispute management system can help you quickly and efficiently work with carriers to achieve credits and/or corrections for discrepancies identified during the invoice validation process. Best-in-class dispute management systems include an automated workflow component that provides full lifecycle tracking of the disputed charges, including disposition, amount recovered, important dates, and more. Invoices with disputed charges can be paid in full with disputes or short paid.

Contract negotiation and optimization

Negotiating favorable rates and selecting service plans that match usage needs are powerful ways to reduce telecom spend. The spend and usage data collected for other invoice management efforts provides valuable insight that can be leveraged to reduce present and future telecom spend. Data gathered from invoice processing reveals how your organization actually uses telecom services, arming you with the information you need to negotiate the most favorable carrier contracts and wireless plans. Invoice management solutions with spend analytics capabilities can help you analyze this information and project future requirements and costs. Armed with this information, you can enter negotiations knowing exactly what you need, and what you can afford to leave on the table. You will be able to make informed decisions that result in significant cost reductions – such as moving to pooled plans or limited wireless data services – without jeopardizing overall quality of service.

Hard dollar savings and more

An invoice management system encompassing electronic processing, invoice validation, dispute management, and contract negotiation can generate immediate hard dollar savings, such as elimination of overcharges, as well as long-term savings resulting from stronger contract negotiation and compliance. Invoice management helps organizations understand and control their telecom usage and spend.

Reducing Telecom Costs: Why Invoice Management is the Best Place to Start
Download the entire white paper NOW