SOURCE: Aberdeen Group, a Harte-Hanks Company

April 04, 2007 06:30 ET

Gap Between Finance and IT -- an Obstacle to Effective Telecom Cost Management

Average Fortune 500 Company Is Not Managing $61 Million in Telecom Expenses

BOSTON, MA -- (MARKET WIRE) -- April 4, 2007 -- In the new benchmark report, The CFO's View of Telecom Cost Management, Aberdeen Group, a Harte-Hanks Company (NYSE: HHS), found that 75% of financial managers site lack of staff expertise as the top challenge to effective management of telecom costs while only 33% of IT managers see staffing expertise as an obstacle. This report highlights areas where Best in Class performers are using technology to drive savings and bridge the gap between finance and IT.

"Overall, 63% of survey respondents currently have a program to reduce telecom costs, yet results vary wildly because most firms fail to properly implement the components that are necessary for top performance," said Joe Basili, Research Director at Aberdeen Group. The result of failing to implement the right technology and bridging the divide is that enterprises proactively manage only 67% of their telecom expenses.

The average company, with over $1 billion in revenue, spends approximately 1% of their revenue or $182 million on telecom expenses. This means, on average, Fortune 500 Companies are not managing $61 million in expenses. The survey found that 65% of enterprises do not have an accurate inventory for service usage data. In addition, 49% of the respondents identified lack of automation to manage network expenses as another obstacle to achieving effective network cost management.

Best in Class enterprises are using technology and business process outsourcing to bridge the gap between finance and IT. Top performers automate invoice processing. They also establish portals for invoice approval and bill payment. Best in Class reported a 67% reduction in operational costs and a 62% reduction in late payment penalties after implementing technology. They also establish robust reporting with accruals and usage-based allocation chargeback by business unit, division and region to drive accountability for expenses. These programs help to bridge the gap between finance and IT by offering both groups the tools and data to manage network costs. Best in Class enterprises also report 65% improved procurement efficiency and 45% improved audit results.

Aberdeen Group is pleased to have AnchorPoint, MBG Expense Management, LLC, PowerTrack, and TnT Partners, as sponsors for this report. Their sponsorship enables Aberdeen to make the report available at no charge through the following link: http://www.aberdeen.com/link/sponsor.asp?cid=3935

About Aberdeen Group, a Harte-Hanks Company

Aberdeen is a leading provider of fact-based research and market intelligence that delivers demonstrable results. Having benchmarked more than 30,000 companies in the past two years, Aberdeen is uniquely positioned to educate users to action: driving market awareness, creating demand, enabling sales, and delivering meaningful return-on-investment analysis. As the trusted advisor to the global technology markets, corporations turn to Aberdeen™ for insights that drive decisions.

As a Harte-Hanks Company, Aberdeen plays a key role of putting content in context for the global direct and targeted marketing company. Aberdeen's analytical and independent view of the "customer optimization" process of Harte-Hanks (Information - Opportunity - Insight - Engagement - Interaction) extends the client value and accentuates the strategic role Harte-Hanks brings to the market. For additional information, visit Aberdeen http://www.aberdeen.com or call (617) 723-7890, or to learn more about Harte-Hanks, call (800) 456-9748 or go to http://www.harte-hanks.com.

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