Information Technology to Transform a Company Term Paper

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Information Technology to Transform a Company

Transform Company

Before going into the factors that are holding back Teltron from growth, it is worthwhile to have a brief introduction in the realm of Telecom Expense Management --TEM on which this Case Study is based. Spiraling growth in telecom services, features, and vendors along with the deregulation in the telecom industry have made contract documents complicated, pricing programs, processes and billing. This apart, financial constrains have resulted in customer service getting compromised, lack of accuracy in billing, and reporting from telecom service providers. In this backdrop, inaccuracies as also opportunities for optimizing services happen frequently. Presently, font ranking companies are adopting TEM solutions as best practices. Major opportunities are in store to lower costs, enhance service levels and allay risks. The general benefits of TEM include (i) lowering invoice processing and payment costs (ii) make late fees a thing of the past, supplicate payments and excess payments (iii) locate unauthorized, pointless, and unused services (iv) assure contract compliance and recovery of errors in billing (v) achieve control, visibility and responsibility on all expenses (vi) strike and maintain precise telecom inventory (vii) optimize asset and usage utilization (viii) control buying power and bargain for the best rates (ix) raise the capacity of staff and realign to strategic goals. (Cass Information Systems Inc., 2007)

1. What factors are holding Teletron back from growth? Where are Teletrona's growth opportunities?

Tim Lybrook's role as the consultant to the resort industry was reviewing the cost structure of his clients spotted gross inaccuracies in their telephone bills which went up to 30%. Tim found that the factors responsible for the errors are complexity of bills, organizational size, service diversity levels and most importantly errors on the part of service providers. Teletron started targeting customers in the U.S. between $10,000 & $5, 00,000 monthly on telecom services. In the initial stages, Teltron was performing exceedingly well finding out inaccuracies in bills, compiling the savings thereof and invoicing the customers accordingly for the fee. However, the major factor which was holding Teletron back from growth was that the company was unable to garner repeat business from the same client which is very important for profitability. In an effort the workforce tried to solicit a longer-term relationship with the client, auditing their bills regularly, but the clients were not keen to accept this extra service. (DeHayes, 2003)

Majority of the client relationship with the company endured within 6 months to a year and the company was required to hunt for new client regularly which made a dent in its profitability. It was at this juncture that Teletron had doubts if the company could continue to grow under the present business model. There was a 90% customer shake up, needing costly customer acquisition process. When the carriers rectified the mistakes, majority of Teletron customers had a feeling that they no more required the services of the company. Besides, several other companies engaged the services of other persons to locate billing errors in order to keep the entire savings instead of sharing the savings with Teletron. Apart from that, Tim discovered that the entire process of auditing was time consuming one. The growth opportunities of the company lay in its ability to interpret telecom bills, locate errors, make a comparison of the contracts and tariffs with the present invoices and deal with telecom providers. Tim regarded this proficiency to be made applicable equally well to the local, long distance, wireless, Internet and data markets also. (DeHayes, 2003)

2. Evaluate the Virtual Analyzer software vs. The needs heard in the market.

Broadly Teletron's Virtual Analyser has six major modules matching with the market requirements. These are Client Information Mgt., Move, Add & Change (MAC) processing, Vendor Invoice Processing & Vendor Invoice Payment; Invoice Analyser, Rate Optimizer and Industry Information Mgt. As against this, the exacting needs of the market are (i) customers require better access to provider plans and contracts and they do not have enough knowledge regarding the products they are buying. They use a lot of provider plans or contracts each different in their own way. (ii) Customers require assistance in vendor invoice processing and payment and they require collecting all the bills for analysis in the first stage. A lot of customers need an interface for the company's account payable system. (iii) Customer needs a central contact point for making changes and providing attention of the daily duties to make data up-to-date such as move, add of change in the most cost effective manner. Customers will be happy if the change were subsequently updated in the total inventory list of telecom services. (DeHayes, 2003) iv) Customers need data on expense management which is Teletron's bread and butter. Skill is required to completely analyze the data leading to realization of savings in costs. Some companies engage the services of other people to undertake the auditing or use Teletron's services. (v) Inventory Mgt: Almost all the customers have huge problems in tracking the equipment and features deployed in every part of their telecom environment. They are required to have information on every telecom services used at each site. These services consist of the features, the service provider extending the service, the accounts which the service provider charges for the service, and the devices made use of for providing the service. (vi) Finally customers have a real need for some sort of analytical potential. Some of the reports which they need are usage studies, service assessment and recommendations, market comparisons with other companies to determine whether they are getting a good rate, vendor analysis to find out if they are having the ideal vendors, and also risk assessment. (DeHayes, 2003)

Concurrently, it is also important for companies to give exposure to Telecom Expense Management Training which will equip the workforce in control of telecom expenses of their companies. Through analysis of long distance bill with contract one can learn more than cost per minute. Learning auditing frame relay bills, comparing them to contracts, learning the components of frame and the manner in which these costs must be billed, analyze data and check for accuracy levels. Besides auditing Internet invoices and basic wireless bills to recover savings and maintenance contracts and review of fundamental problem solving techniques will also help in the long-term. (Auditel Inc., 2003)

It is a fact that wireless voice communications averaging $75 per use monthly in U.S. companies and up to twice than that for data services such as wireless e-mail and Internet access. A lot of these companies are turning to these packages to assist them to put a check on their telecom costs, according to VP, Forrester Research. Capital One, Best Buy and Ikon Office Solutions are some of the few business that apply telecom expense management software to look after their wireless program, in the opinion of software vendors and media coverage. For example, the result of an audit found that Sodexho -- the catering and facilities management giant had nearly 500 idle or sparingly used telephones and no official policy for procurement and managing wireless devices. (Bennett, 2006)

3. What additional information would be useful to Tim in order to make a final decision?

Comprehending all the aspects of the proposed usefulness of the Virtual Analyzer covered in the six modules, it would be useful for Tim to be aware if the customer will be willing to buy the commercial software to help them manage their problems. Customers might refrain from buying Virtual Analyzer and otherwise employ their internal system development departments to design an in-house system. They might even prefer to continue doing such manually or hire the services of an outside operator. It would also be useful in gathering information if Teletron is the first company to hit upon the idea of using Information Technology to transform a company in the realm of Telecom Expense Mgt. so that he might enjoy being the first mover advantage. The details of competitors of Teletron and the services they extend are required to be known at the minutest level so that Teletron can be different in service delivery mechanism. (DeHayes, 2003)

4. Financially evaluate the proposed change in the business model

It is seen that the market is very gigantic. The uncovered telecom cost management market is poised to rise from less than $2 billion to more than 45 billion by 2005 which is a 25% compound annual growth rate -- CARG. The market is marked by the absence of any major player and hence in case the company is able to corner a mere 5% of that market which is achievable, then that is going to translate into a huge sales scope. The company will able to witness massive growth and meet the $100 million revenue earnings objective in 7 years. Looking at the size of the market, it is just a fraction of the $5 billion market that is needed to come to the 2006 target revenue. However, it going to be difficult in attaining that… [END OF PREVIEW]

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