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Copyright © 2015 Blue Hill Research Page 1
ANATOMY OF A DECISION
The Restaurant Industry’s Case for Choosing Cass for Telecom and Utility Expense Management
Published: March 2015
Analyst: Hyoun Park, Chief Research Officer
What You Need To Know
Retail, hospitality, and restaurant industries all share the key pain points of standardizing their store locations, managing their operational sourcing, and then enforcing their contracts and discounts to optimize operational costs. Telecom is one of the most challenging sourcing and procurement categories for multi-location businesses to manage, due to the wide variety of billing formats, complex market offerings, and technical expertise needed to fully manage these costs.
This report explores the challenges and selection process that a leading multi-location restaurant chain pursued in choosing an appropriate TEM solution to support a fast-growing store footprint, and seeking to bring greater visibility and simplicity to its telecom and utility expense management processes. This nuanced decision-making process gained Blue Hill’s attention because of this company’s careful due diligence in choosing the most appropriate technical and service-based TEM solution for its telecom and utilities expense needs.
About the Subject
The restaurant and food service company mentioned provides quick-service food service, food preparation, and catering services. This publicly traded company asked not to be named for this report, but currently has over 1,000 locations across North America.
For this report, Blue Hill spoke with the Chief Accounting Officer of this firm, who served as the executive champion for this telecom expense management purchase decision, and provided guidance
AT A GLANCE
The Company
US-based multi-location restaurant
The Challenge
Managing telecom vendor billing and disputes, Accounts Payable resource limitations, combined with a high growth environment requiring more services
Solutions Considered
Cass Information Systems, Dimension Data, Tangoe
Solution Chosen
Cass Information Systems
The Champion
Chief Accounting Officer
Report Number: A0138
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ANATOMY OF A DECISION
throughout the decision-making process. This officer is responsible for the accounting challenges including tax, corporate accounting, property accounting, leases, shared services, cash, accounts payable, accounts receivable, payroll, and external reporting.
Identifying the Need
This food service organization, like many fast-growing multi-location businesses, had to deal with the key challenge of quickly setting up and managing store infrastructure and services as it rapidly expanded, including phone lines, network circuits, and other telecom and network services. As is common with many complex spend categories, based on Blue Hill’s experience, the responsibilities for telecom expenses at this company was split among multiple departments. The accounts payable department processed these invoices, which were then sent to the IT department. IT then reviewed telecom invoices that were largely paper-based and set codes and cross-billing designations that were then sent to accounting. The accounting department managed accruals associated with these services, then sent invoices to accounts payable to be processed.
As this company set up telecom and network infrastructure for each store and increased the breadth of technology services that it sourced from telecom carriers in each café to support both internal business needs and customer conveniences, the IT department identified telecom sourcing and procurement as an area where this restaurant chain could gain efficiencies by outsourcing aspects of its telecom management, such as inventory management and centralized contract term visibility and enforcement. Because of this challenge, this firm sought a more centralized and standardized way to manage its telecom sourcing and procurement processes.
Although this food services company realized that this pain point existed, the decision to commit to a dedicated solution was a stop-and-go process since telecom expenses were one of many operational priorities that the company sought to manage in its constant search for greater efficiencies. However, by the end of 2013, the time and effort associated with managing a telecom supplier and disputing previously-terminated services had reached the point where telecom management became a key concern that had to be solved based on a classic challenge of hiring or buying.
When we started looking for telecom management, we had starts and stops because we were balancing many competing priorities. But when we saw difficulties disputing lines that had been terminated much earlier by a telecom vendor, the internal noise level got to the point where we had to
take action.
Chief Accounting Officer Restaurant Industry
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ANATOMY OF A DECISION
Key Challenges and Concerns
When this company initially sought vendors to manage its telecom expense environment, it sought a solution that could first and foremost provide a centralized view of telecom services. However, within that purview, there were several key priorities that needed to be taken into account.
As an Oracle ERP shop, this company sought a TEM solution that would integrate with its ERP with the same ease and seamlessness associated with fixed asset management solutions or consolidation and close software solutions linked to Oracle. The TEM solution had to integrate as easily as any other financial operations software in the portfolio.
This café chain also sought a variety of references that could provide an accurate view of the TEM implementation process to ensure that the vendor’s technical claims, subject matter expertise, and service capabilities could be validated through experience.
In addition, this restaurant market leader sought a partner that could solve multiple operational expense roles, if possible. Because of the inherent challenges associated with managing a quickly growing store footprint, the company sought to include gas, water, and electric expenses in their TEM deployment as well to make operational chargebacks and expense visibility easier to support.
Making the Decision for Cass Information Systems
The telecom expense management landscape can be challenging to traverse, since this market includes stand-alone managed services providers, software providers, consulting services from larger outsourcers and communications services providers, and professional audit services, all of which call themselves “telecom expense management.” Because of this, it is important for potential TEM buyers to decide on an approach as they start their vendor selection process. Otherwise, companies can quickly get into a situation where they are comparing apples and oranges where prices, services, and tradeoffs make a direct comparison nearly impossible.
This restaurant initially looked at the largest pure-play TEM, Tangoe, but found the vendor’s focus on multinational references to be less relevant to the company’s North America-specific telecom challenges. Because of this, the restaurant chain focused its selection decision on two top vendors in the TEM industry that provided both global and domestic references: Dimension Data and Cass Information Systems.
This decision ended up being a challenging and nuanced evaluation, as both Dimension Data and Cass Information Systems provided strong presentations and TEM capabilities. Both vendors showed strong technical expertise and were able to demonstratively prove their competence in core technological and
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ANATOMY OF A DECISION
service capabilities. In addition, both vendors have a strong long-term track record as TEM vendors. Dimension Data’s TEM capabilities are based on its acquisition of Xigo (previously Invoice Insight) and Cass Information Systems has provided TEM services for over a decade.
Ultimately, this choice was decided by three different areas:
x The IT’s department’s evaluation of software design and user experience
x Positive customer references regarding service evaluations
x The ability to support utility bill processing outsourcing.
From an IT mindset, this corporation asked its internal subject matter expert to evaluate the look and feel of both Dimension Data and Cass Information Systems to determine which solution would be superior from a day-to-day interaction perspective. During this evaluation, the IT department determined that it preferred Cass for pulling data and reports that were needed for operational rollups, contract visibility, and vendor management. Blue Hill has seen the increasing importance of end-user experience in vendor selections, as design has increasingly become a key competitive differentiator in financial, operational, and IT management solutions.
This firm also asked for a variety of references from existing customers to verify vendor customer service capabilities. In these discussions, this restaurant company found that although both vendors had solid references that spoke highly of vendor capabilities, Cass’ references brought up the accessibility and availability of their TEM customer services capabilities to a greater extent than Dimension Data’s references.
Finally, this company sought a telecom expense management solution that would also support managing utilities expenses. Although telecom and utilities are often lumped together from an operational and accounting perspective, this nuance is actually much trickier to manage in practice for several reasons. First, telecom expenses exist in a marketplace where there are hundreds of service providers providing thousands of different products, rate plans, and services being supported through a variety of paper and electronic billing formats. This complexity often means that TEM providers have had to specialize in the specific details of managing telecom to deal with the nuances of new technologies, tax tables, regulations, and the personalized flavors of EDI and billing information that each provider manages.
The Case for Design
Blue Hill believes that design and usability are increasingly important differentiators for financial operations, expense management, and performance management software. To learn more about this research, read Blue Hill’s analyst insight on performance management:
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ANATOMY OF A DECISION
Blue Hill Insight – Utility vs. Telecom Management
Utilities markets are typically less competitive and less complex to bill because there are fewer providers, only a few rate plans, and little-to-no feature differentiation. However, this lack of nuance also means that utility billing often lacks the margin needed for TEM companies to focus on accurately dealing with utility expense management within a highly regulated world of utilities that work outside of the separately regulated world of telecom and network services. In this particular circumstance, this company saw Cass’ partnership with Schneider for utility management as a key differentiator to support this aggregation of telecom and utility management within one solution. The Schneider partnership provided the potential to pursue rate optimization opportunities based on the ability to re-categorize a café as a specific type of business.
Because Cass was seen as easier to use by the IT stakeholder team, perceived to be more responsive from a service perspective, and could demonstrate its capabilities to manage utility expenses outside of telecom, this restaurant company ended up choosing Cass after a close and competitive evaluation process.
Initial Results
As of the time of this report, this food services company is in the initial stages of its Cass deployment. In these early stages, the positive implementation references that Cass provided in the evaluation process proved accurate, including the ability to fully implement within a 60 day period and to quickly integrate with an Oracle ERP implementation.
Since this company started using Cass in a production environment, the client has identified that it is satisfied with Cass’ ability to provide telecom visibility in a variety of areas such as inventory, pricing, and contract alignment alerts. Based on these initial successes, this company is looking forward to the next steps in its TEM journey, such as receiving the full benefits of the audit that Cass conducted to fully detect and correct instances of overpayment.
The firm’s decision making process for TEM portrays a variety of traits that are foundational to enterprise technology evaluations. First, the firm had multiple stakeholders associated with its telecom expenses, ranging from accounting to accounts payable to information technology. In today’s enterprise technology world, it is important to tie together the relevant financial, technical, and operational stakeholders associated with each technology, and then ensure that these stakeholders work together. Also, the executive champion understood the key pain points that this technology solution would solve.
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ANATOMY OF A DECISION
Because the Chief Accounting Officer saw the business value in fixing key challenges of accruing for telecom bills, gaining contract and inventory visibility, and disputing carrier invoices, the firm was in a better position to push this solution selection forward. Despite the stops and starts that occurred, the restaurant chain had sufficient TEM visibility to move forward once the pain points made TEM a top business priority.
Key Takeaways and Recommendations
Based on this decision-making process and Blue Hill’s observations in supporting enterprise applications selections across a variety of telecom and financial operations markets, Blue Hill makes the following key recommendations for organizations considering a telecom expense management solution selection process:
Identify the right delivery method to make sure you are considering the correct family of vendors. One of the challenges of choosing a telecom expense management vendor is that this vendor marketplace is often clumped into a combined set of software, managed services, and professional services that all call themselves telecom expense management. The irony of choosing specific and complex enterprise technology solutions is that these solution landscapes are often less clear than landscapes for software solutions that are better defined. As companies look for telecom expense management solutions, they have to start by deciding on a fully in-sourced, outsourced, hybrid, or professional services engagement model, and then build out their landscape accordingly. If this is not done, potential buyers will run into a classic issue that Blue Hill sees far too often: an apples vs. oranges head-to-head comparison where companies are not just choosing between solutions, but inadvertently also choosing a new services model or operational model that causes long-term challenges.
Look beyond the “upper right quadrant.” We have all seen the charts that show some sort of box that ranks vendors in a 2x2 matrix. Although there is nothing wrong with looking at that part of the box, the honest truth is that these charts are often based on sales momentum, a specific multi-feature set of capabilities, or “analyst vision” that are irrelevant to the key traits a customer actually wants to use. The reality is that the right vendor may not be in the “box” that you have initially considered. Although this is a self-serving recommendation, consider getting a free inquiry from the likes of Blue Hill or other analyst and consultant firms that are focused on helping enterprise end users make better decisions.
Conduct due diligence on key evaluation traits with end user inquiries. Although it may be easier to provide a Request for Proposal and have vendors fill out check boxes for key capabilities, companies should also ask for end user inquiries and recommendations. Blue Hill typically finds that even the most glowing end-user recommendations are often accompanied by at least one warning or concern that end users are willing to privately share. Sometimes these warnings are relevant to the organization’s concerns, and sometimes not. But in Blue Hill’s role as an end-user advocate for better software decisions, our firm recommends taking the approach that this firm took to evaluate TEM solutions.
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ANATOMY OF A DECISION
Start to codify user experience and software design standards. Blue Hill has noticed an increasing trend in its Anatomy of a Decision reports and end-user inquiries for the user experience to be a key decision factor in making a final decision. Because of this, companies should start thinking about how to describe software design and user experience in terms that are more specific than simply having a personal preference. Consider how quickly the technology or service provides access to key data and reports, how similar or integrated the evaluated solution is to existing software and processes, and the time-to-value, since agile operations and quick payback are increasingly more important than a hypothetical five or ten-year time frame for achieving value.
Customer Service should be evaluated on multiple levels, including quality, timeliness, and rapid response. In a limited evaluation period, the easiest way to evaluate service is based on asking for technical expertise or support for standard processes. Although these represent good starting points, it is also important to evaluate the speed of response and the quality of response to non-standard requests and problems. To do this, consider the firm-specific issues that your organization has that either come from legacy operational processes or from differentiated and competitive advantages. By bringing this level of specificity into the service evaluation process, both through direct evaluation and end-user recommendations, companies can improve their service quality from Day One of a production implementation.
Consider Cass for quick TEM implementations of a multi-location business environment. This case study is an established proof point that Cass Information Systems can provide a fast implementation for companies with over 1,000 locations, while supporting Oracle ERP implementation and pleasing a multi-departmental team of telecom expense stakeholders. In a head-to-head against two other market leaders, this restaurant chain chose Cass based on its support, design, and expanded expense management capabilities compared to the typical telecom expense management specialized organizations.
By learning both from these best practices and key emerging enterprise solution selection practices, Blue Hill expects that companies choosing a TEM solution will be better positioned to identify key challenges and decision points, select an appropriate set of vendors for evaluation, and find the right solution to meet both the needs initially identified and the needs that emerge during the evaluation process. Through these best practices, companies can improve their telecom inventory and contract visibility in a timely manner and traverse the nuanced TEM marketplace more easily.
Blue Hill Research is the only industry analyst firm with a success-based methodology. Based on the Path to Success, Blue HillResearch provides unique and differentiated guidance to translate corporate technology investments into success for the three keystakeholders: the technologist, the financial buyer, and the line of business executive.
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ABOUT THE AUTHOR
Hyoun ParkChief Research Officer
Phone: +1 (617)624-3600
Fax : +1 (617)367-4210
Twitter: @BlueHillBoston
LinkedIn: www.linkedin.com/company/blue-hill-research
Contact Research: [email protected]
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@hyounpark
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Hyoun Park is the Chief Research Officer of Blue HillResearch where he oversees day-to-day research
operations, delivery and methodology focused on vendorand technology selection. In addition, Park covers
analytics and enterprise mobility technologies as a notedadvisor, social influencer, and practitioner. Park has been
named as a top 10 Big Data, analytics, and mobilityinfluencer including quotes in USA Today, the Los AngelesTimes, and a wide variety of industry media sources. Over
the past 20 years, Park has been on the cutting edge of web,social, cloud, and mobile technologies in both startup and
enterprise roles. Park holds a Masters of BusinessAdministration from Boston University and graduated with
a Bachelor of Arts in Women's and Gender Studies fromAmherst College.
