Enterprises Cry "Help"

Wireless Week Via Thomson Dialog NewsEdge, July 05, 2006 - One of the trends in unwiring the enterprise this year has been the growth of companies created to provide managed telecommunications services for enterprises, especially for the expanding use of wireless services.

These companies, which fall under the category of "telecommunications expense management" (TEM), provide all manner of services for enterprises. These can include almost anything planning the enterprise's telecommunications needs, working with service providers, getting the service deployed, managing the service on an ongoing basis, even paying the bills.

The need for TEM providers is growing as telecommunications becomes more complex, especially with enterprises adding more wireless voice and data services.

BURGEONING INDUSTRY

Phil Redman, research vice president for Gartner, says there are more than 80 companies aimed at TEM, with a growing number of providers offering wireless services. Gartner expects the TEM industry to generate $555 million in revenue this year, although most of the companies providing the services generate less than $2 million a year.

Redman says wireless telecom is taking a bigger bite of an enterprise's monthly phone bill and is becoming more difficult for an enterprise to handle itself, given the multiple carriers, multiple devices and multiple services offered.

Enterprises quickly are discovering that they are spending more than they thought on wireless services and are learning that they don't have the resources to handle everything that needs to be done. Turning over bill processing alone can turn up mistakes that save an enterprise as much as 10 or 20 percent of their costs, Redman says.

Most of the TEM companies come out of wireline business, while others have sprung up to provide managed wireless services. Redman thinks the trend will be one of consolidation in the industry, including consolidation of wireline and wireless services.

"Enterprises want to have someone who can manage both their wireline and wireless services," the analyst says, adding that managed telecom services should be part of an enterprise's overall outsourcing strategy.

Kathryn Weldon, principal enterprise mobility analyst at Current Analysis, says the growth of managed wireless services companies is due to the lack of these services by the carriers themselves. Sprint Nextel has been the best at providing enterprise services, but still falls short because it cannot get access to a competitor's billing mechanism, she says.

Managed services companies can be carrier agnostic, providing a full range of services using multiple providers, Weldon says. She cited two companies, Movêro Technology and Integrated Mobile, that focus on wireless services. Both companies were created within the last 3 years, founded by former Sprint executives.

Weldon says a third party probably can provide the range of managed services for enterprises that a single carrier cannot. These third-party companies also can help carriers by providing an automated cross-carrier solution, she says.

INCREASINGLY COMPLEX

Ann Grackin of ChainLink Research says enterprises are increasingly challenged to manage their wireless services because there are so many more services and applications being used. That's compounded by the need to manage services used by remote and mobile workers, she says.

As new wireless applications emerge, such as RFID, this scenario is only going to become more complicated, Grackin says.

According to Bruce Friedman, CEO of Austin-based Movêro, there can be significant savings for an enterprise using managed wireless services. A recent cost-analysis for a Boston company showed that the company, whose 100 employees used 250 different mobile devices, could save $105,000 in one year by outsourcing. The devices included mobile phones, BlackBerries, Pocket PCs, Palms and wireless data cards.

A number of traditional business services companies are starting to get into managed wireless services, Friedman says, but he thinks Movêro can compete against them because it has working relationships with all of the carriers.

Movêro also is opening a certification laboratory, called mLab, which will help enterprises validate different wireless solutions. These could include security or even ensuring that a CRM application works properly.

Analyst Weldon thinks medium to large enterprises are the most likely to use these types of managed services. With all of the headaches companies have with acquisition, integration, management and security, "they just make sense," she says.