We’ve been fans of TEM industry analyst Hyoun Park for a while. As CEO and Principal Analyst at Amalgam Insights, he always offers a thoughtful perspective on how the technology expense management space is evolving.  We recently had a chance to listen to his predictions for 2021 in a recent webinar and wanted to highlight a few that really stood out to us.

Remote Working Becomes “Permanent” for 25% of All Employees.  Park makes a couple of important points here. First, 25% would represent a 5X increase over pre-COVID remote working.  Second, this percentage represents workers who stay home even after a COVID-19 vaccine is available.  Third, that kind of massive, permanent shift away from office work has major technology expense management implications.  We’ve commented on the demand for VPNs, internet access, unified communications already.  But Park points out that another big question facing businesses is what to do with their legacy, office-oriented, IT infrastructure when many employees are not in the office.

Legacy “wireline” telecom costs continue their decline, offset by price increases in business mobility.  Traditional wireline telecom services such as 800 service, business POTs, private line, and dedicated internet access have become increasingly commoditized in recent years. Park sees this trend only continuing in 2021 and estimates that businesses will spend less on traditional wireline services.   On the flip side, businesses will spend more on mobility services as the shift to everything being wireless enabled continues.

RPA, Machine Learning Become Critical for Expense Management Automation.  Park points out that when it comes to tasks such as analyzing telecom invoices from hundreds of different carriers or automating the process of finding potential savings, robotic process automation (RPA) and machine learning will be critical technologies because they can perform these tasks far more efficiently than human analysts.  He adds that because there are few data analysts and machine learning experts focused on TEM, these capabilities will likely come “through the platform”, i.e., from service providers or are built into third-party, commercial software solutions.

The Cloud, and Cloud-Based Apps, Drive New IT Spend.  Park predicts that 50% of all new IT spend will be cloud-related.  A large part of that will be driven by the costs associated with shifting legacy infrastructure and applications to the cloud or replacing them outright with “cloud-native” solutions.  But another driver is the rapid adoption of cloud-based applications in different parts of the enterprise, such as HR, marketing, and finance.  As part of this trend, Park forecasts that a typical large enterprise will use over 1000 different software applications, most of them cloud-based.

The Bottom Line. Overall, our takeaway from Park’s discussion was first, we are seeing dramatic and permanent “macro changes” in how businesses and their employees do their work.  Many of these changes have been in the works for years but are now accelerated by COVID-19 and other forces.  Business technology offerings and investment requirements are shifting to meet these changes.  This means businesses themselves need to assess their current technology and telecommunications infrastructure and determine what they need to alter.  And because these efforts have significant cost implications, having an effective way to track and manage costs will be a “must-have” for businesses to survive and thrive in these changing times.

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