What's the difference between Telecom Auditing and Telecom Expense Management?

This is a question we deal with on a daily basis, and one that I believe has yet to be sufficiently answered. In fact I think many in our industry are also having a difficult time answering the question. For example there's a session in the upcoming Total Telecom Auditing Conference entitled "TEM vs. The Auditor" with the following description:

TEM vs. The Auditor

Telecom expense management (TEM) firms claim that automating bill processing and other auditing tasks will make it easier to find savings and billing errors. Auditors, meanwhile, argue that hiring a TEM company is like using a sledgehammer to swat a fly; you need more precision. So what role should TEM play at your enterprise? What are its limitations? How might an enterprise’s own auditor work in concert with TEM? Get the answers to these questions, and your own, when you hear from an auditing pro employed by a TEM firm, two enterprise telecom managers and an independent auditor.

I think the above description exemplifies the challenges we as an industry have in answering what would seem to be such a simple question. You would think there would be clear cut differences between TEM and Telecom Auditing solutions. For instance the statement from above "Auditors, meanwhile, argue that hiring a TEM company is like using a sledgehammer to swat a fly; you need more precision". Does that mean that auditors believe TEM is not precise?

Prior to discussing the differences perhaps we should start by defining Telecom Auditing and Telecom Expense Management.

Telecom Auditing - Most would agree there are two types of audits, an audit to evaluate costs, and one to audit physical inventory. With either type of audit the definition would be the same. An audit is considered an independent assessment to ascertain the validity and reliability of information. 

Telecom Expense Management - Wikipedia says TEM is a term used to define a business approach to managing telecommunication service expenses (Voice, Data, and Wireless) with a combination of software tools and manual auditing.

So TEM may use software tools and manual auditing doesn't? Wouldn't a telecom auditor need software tools as well? Certainly they're not going to provide your audit results without using software.

Now this is where I believe there needs to be some discussion and agreement. TEM firms and Telecom Auditors are in the same business, and have the same goals. By trying to differentiate ourselves by stating one is more precise would simply be inaccurate. A better differentiator might be what we use as software tools and which tools are best suited to the scope and size of the audit. As I pointed out earlier it seems some auditors feel TEM means implementing complex software because of the comment "TEM is like using a sledgehammer to swat a fly; you need more precision.

If you’re looking for the differences between telecom auditing and TEM I believe the biggest differentiator would be the software tools. Most auditors use Excel spreadsheets as their auditing software tool and most TEM firms have proprietary software. Some focus on Fortune 500 companies and hence have large scale, complex software aka a sledgehammer; and others have developed software for small and medium enterprises that is smaller scale and easy to use, aka a flyswatter.

At the end of the day if you’re looking for the difference between Telecom Auditing and Telecom Expense Management the differences begin and end with the software.  

The next article will discuss some of the differences in software tools, from spreadsheets to hosted or server based software for both the Fortune 500 as well as the Small and Medium Enterprise.

What are your thoughts? Do you agree software is the biggest differentiator between Telecom Auditors and Telecom Expense Management?