For most companies, fixed and mobile communications services are among the top five business expenses, but they often do a poor job of managing processes relating to communications spending. Companies of all sizes can benefit from using telecom expense management (TEM) services to offload noncore activities and optimize related spending.

This is Gartner's first Magic Quadrant on providers in the worldwide TEM services market. Previously Gartner has rated vendors in this market only in MarketScopes.

The TEM market has stabilized in terms of services offered and delivery channels. Interest in these services continues to grow, as does adoption — the market grew from slightly more than $750 million in 2009 to just under $895 million in 2010.

To make users' decision-making easier, Gartner has reduced the number of TEM providers analyzed in order to provider a fuller evaluation of each. This Magic Quadrant also takes a narrower view of the global TEM market than that of prior MarketScopes. It focuses on services, delivered by third parties, relating to processes for the sourcing, procurement and auditing functions connected with business communications expenses. It also considers nonrecurring services, such as one-time historical audits, and other advisory services relating to enterprises' communications expenditure.

Across the world, the TEM market is shifting its focus from the acquisition of applications and tools to the outsourcing of key processes in light of inadequate internal resources.

Also, as many companies look to centralize procurement and management for both wired and mobile services, the largest are pressing for global support. This is one of the fastest-growing requests, but it relates to one of the market's more immature offerings.

Although much adoption continues to occur in the managed-services space, Gartner believes the market will reward providers that offer value beyond traditional TEM by bundling these services within larger communications outsourcing and professional services (COPS) agreements. Some vendors — AT&T and Vodafone, for example — are willing to assume ownership of customers' assets and transfer service contract ownership, so that the vendor becomes the customer of record (a process of contract novation).

The market for TEM services still depends mostly on selectively sourced initiatives. However, broader value, compared with what has historically been considered in Gartner's TEM rating documents, is increasingly being demanded, and is increasingly seen in larger COPS deals.

Leaders and Challengers in this Magic Quadrant are providers that are increasing their scale and competency in order to move in this direction. Scale and competency can relate to geographic coverage, the ability to provide for more layers of the TEM life cycle, or the capacity to extend abilities across fixed and mobile requirements.

TEM services encompass the processes conducted by IT and finance departments to acquire, provide and support corporate communications services, both fixed and mobile.

The solutions of providers rated in this Magic Quadrant are service-based — the user off-loads processes to a third-party service provider. The critical component in any TEM service is the underlying TEM application, generally extended in a software-as-a-service model, that provides varying levels of process automation. This application may tie in to relevant business applications and software packages — such as ERP, CRM, HR and call accounting — to facilitate the processing of tasks related to communications services.

Gartner identifies the following component disciplines of TEM, for fixed and mobile services:

• Sourcing management enables buyers to negotiate prices, terms and conditions for strategic contracts for communications services.

• Ordering and provisioning management supports the commissioning and deployment of network services and mobile assets, based on predefined rates and support for user profiles, leveraging service catalogs, structured workflow and authorizations. Process services for ordering and provisioning include help desk for order placement and logistics support relating to deployments, replacements and break/fix depot repairs.

• Inventory management applies to processes and services that provide one or all of the following for fixed-mobile services and mobile devices: asset discovery; asset management; asset database/repository; asset portfolio management; and tracking of purchases, leases, contracts and disposal pertaining to telecom assets and expenses. Links to general ledger accounting systems modules, such as the capital asset ledger, are common.

• Invoice and contract management combines the invoice audit function with the accounts payable invoice-processing function.

• Usage management helps identify cost objectives and usage permissions by using call accounting and detailed invoice data. Usage is tracked to allocate costs by individual, department, cost center or other user-defined spending category across any number of corporate locations. Usage management can also identify theft and abuse of network resources.

• Dispute management ensures the recovery of credits and the management of short-pay and no-pay decisions. Leveraging third parties for disputes can optimize expenditure, greatly reduce the cost of disputes and increase corporate liquidity.

• Reporting and business intelligence encompasses a vendor's ability to offer customers practical information and analytics that go beyond basic data or reports, in order to improve financial forecasts and usage planning.

Expenses managed include those for local, long-distance and international fixed services, national and international mobile voice and data services, and transport services for all corporate facilities, offices and remote workers to enable communications between employees, customers and partners. Assets include mobile phones, including smartphones, and mobile-data-enabled tablets.

Gartner does not consider as TEM solutions element management offerings for telecom infrastructure such as PBXs and key telephone systems, Internet Protocol telephony equipment, and other voice communications infrastructure. Element management is covered in a typical network IT engagement.

Over-the-air mobile device management (MDM) services are increasingly bundled within TEM. MDM is an emerging adjacent market, so any attention paid to it by the vendors rated in this document is considered as an aspect of their "Innovation," which is part of their "Completeness of Vision."

Gartner invited 50 vendors of TEM solutions from various geographic regions to participate in the Magic Quadrant process. We then chose 18 vendors to rate in the Magic Quadrant. This coverage is a reflection of the large number of vendors in the market, most of which generate less than $20 million per year in revenue.

All the vendors included in this Magic Quadrant have either published TEM applications or provided TEM outsourcing services for at least three years. In addition, to be included in this Magic Quadrant:

• The vendor must provide managed and/or outsourced TEM solutions for fixed and/or mobile service expenses.

• North America-based vendors must generate at least $10 million per year in TEM revenue. Revenue from sales of stand-alone call accounting software and other non-TEM software is not considered TEM revenue.

• Vendors based outside North America must generate at least $5 million per year in TEM revenue.

• At least 5% of the expenses and mobile assets under management must reside outside the company's home geography.

• Vendors must maintain sales and/or service personnel, whether organically or through formally contracted partnerships, outside their home geography.

• Vendors that do not develop their own operations support systems must maintain a staff of service delivery personnel to provide TEM services to the market. Vendors that do not add value — those that only "private label" the services of others — are not considered in this Magic Quadrant.

For a list of some of the vendors who failed to meet the inclusion criteria, see Note 1.

This is the first Magic Quadrant for TEM.

This is the first Magic Quadrant for TEM.

Gartner evaluates TEM service providers on the quality and efficacy of their processes, systems, methods and procedures that positively impact user operations. Ultimately, providers are judged on their ability and success in capitalizing on their vision.

Gartner evaluates TEM service providers on their ability to articulate logical statements about the market's current and future direction, innovation, customer needs, and competitive forces and how well they map to Gartner's position. The TEM market, while relatively small, is greatly fractured in terms of the number of competitive providers. TEM service providers are rated on their understanding of how market forces can be exploited to create opportunities for them in the TEM services market, as well as of how, and when, to bring innovative services to market.

Leaders have a full portfolio of process management and advisory services. They have also branched into highly visible adjacent markets, such as MDM, to offer services such as enhanced inventory tracking and proactive, event-based expense management. These services are delivered with good quality, across a wide coverage area, and at competitive prices, by well-staffed account teams. Leaders have a strong vision of the market and their role within it. Leaders are more able than other providers to address a broad range of customers with deep service expectations.

Challengers offer a good portfolio of process management and advisory services with good operational capabilities. However, their long-term plans to compete in this market may be vague, undifferentiated or focused internally, rather than on the market's needs. Their new service capabilities are probably more limited than those of the Leaders.

Visionaries have a good understanding of the market's direction and of how they function in the market. They typically have a strong road map for new service offerings. However, their service delivery capabilities are more limited, and their ability to execute on their vision may be constrained by financial or operational limitations.

Niche Players do not address the full range of needs covered in this Magic Quadrant. They may have a deliberately narrow strategy, or they may lack the necessary investment or broad vision to serve the needs of the global market. Niche Players may excel in specific service categories, a specific sourcing model, a specific geography or a particular customer demographic.

Accenture is a global consulting, technology services and outsourcing company registered in Dublin, Ireland. Its approach to TEM services is to wrap its global presence and personnel around smaller, pure-play, private-label partners. Effectively, Accenture is vendor-neutral in terms of TEM applications used as a service delivery platform, and it has implemented multiple TEM solutions. Accenture's most significant partnerships, in terms of go-to-market relationships and solution integration, are with Invoice Insight, MDSL, Rivermine and Tangoe. Companies that have a positive non-telecom outsourcing IT and/or process relationship with Accenture would be wise to include the company on their bid list as a provider or as an independent program manager to assist in the integration of TEM solutions.

Gartner believes that Accenture is an appropriate choice for managed TEM services and process outsourcing solutions, regardless of region, service environment or level of expenditure.

• Accenture has proven that it can successfully integrate TEM solutions, and provide ongoing support and operations to large multinational companies (MNCs), whatever the service delivery platform.

• Accenture's continued building of help desk and business support analyst resources dedicated to TEM solutions is exemplary among traditional IT and business process outsourcers.

• Accenture is willing to commit to, and negotiate, cost reduction agreements as part of its TEM outsourcing agreements.

• Accenture's broad and deep base of operations enables it to serve any client, anywhere in the world, with direct account support.

• Accenture maintains a broad portfolio and the ability to provide project-based consulting and advisory services for pre- and post-TEM solution implementations.

• Accenture's TEM bid solicitations typically exclude companies with telecom spending of less than $20 million per year. Accenture focuses primarily on companies with high spending and/or multinational complexities.

• Accenture's pricing for TEM services usually exceeds that of its nearest competitor in bids by at least 20% to 30%, with no corresponding increase in related service-level guarantees.

Anatole is based in Courbevoie, France. Its leading solution set for TEM comprises applications for users and partners looking to bring TEM services to market. As Europe shifts to a process outsourcing model, Anatole has added more support and operations services to its portfolio. Anatole's offering focuses on the inventory, invoice and usage management components of the TEM life cycle. Anatole does not provide outsourcing of processes, such as for broad order-to-pay solutions, but engages in partnerships to deliver such services both within and outside Europe. Although Anatole does manage service contracts and some mobile assets outside Europe, the company is focused on European companies operating primarily within Europe.

Gartner believes that Anatole is best placed to provide solutions for Pan-European expenses and mobile assets. Anatole has proven that it can support both large and midsize companies based in Europe, where at least 80% of the service and asset base resides in Europe.

• Anatole has a strong focus on delivering managed services that comprise application hosting, invoice management, auditing and cost allocation.

• During the past 24 months, Anatole has committed more resources, as a percentage of revenue, to its TEM business than any of its competitors. Investments have included a full code rewrite and expansion of features for more dynamic Web 2.0 functionality, and the integration of business intelligence capabilities.

• Anatole has made significant improvements to its approach to sales and services since Gartner's last MarketScope on this topic. The company has built a more robust project-based consulting operation, now maintains offices in France, Belgium, the U.K. and Germany, and engages customers in six languages (English, French, Dutch, German, Italian and Spanish).

• Emerging indirect sales relationships with French CSPs provide a solid channel to market and a means for growth. Currently, Anatole's partners manage over 1.3 million devices using its platform.

• Although Anatole's revenue meets Gartner's criterion for geographic diversity, the company focuses on Western Europe. For companies with significant operations in North America and Asia/Pacific, Anatole does not present a compelling value proposition.

• Anatole's continued lack of broad process-outsourcing capabilities will not appeal to a growing segment of the European market that expects providers to offer these.

AT&T is based in Dallas, Texas, United States. It has been one of the biggest influencers of TEM growth in North America during the past 24 months. The company has not featured in previous TEM MarketScopes because its primary approach to fixed TEM services is to "private label" third-party TEM services. AT&T has, however, also worked to bring its own services to market by means such as the acquisition, in November 2010, of a small professional services unit focused on consulting and advisory services relating to mobility.

For mobile TEM services, Gartner believes that AT&T is best placed to serve North America-based clients, regardless of size, that have broad international exposure of services and assets. For fixed TEM services, based on AT&T's private-label approach, Gartner recommends that clients consider AT&T only to manage North American spending, regardless of their company's size.

• AT&T receives higher marks from customers for fixed TEM services than for mobile TEM services. Overall, customers rate their relationship with AT&T as satisfying. But Gartner would not characterize AT&T's customers as loyal.

• AT&T's new business unit, Advanced Enterprise Mobility Solutions, formed in May 2010, brings to market one of the most comprehensive mobile-centric solution portfolios for global MNCs.

• AT&T's willingness to novate service contracts, across over 50 countries, in order to become the customer of record provides a compelling financial structure for MNCs.

• AT&T has made significant investments in its service delivery platform, to deliver MDM services.

• On paper, AT&T has a compelling value proposition. However, navigating AT&T's enterprise and mobile business units for comprehensive TEM offerings is a challenge. Account management remains the most significant point of dissatisfaction for AT&T's TEM customers.

• AT&T's fixed TEM capabilities are largely based on numerous private-label partnerships. Most of these partners have limited international exposure.

• Customers report that AT&T still relies on CDs and paper for the auditing process, and that it is slow to move them to all-electronic invoicing (even though it has the capabilities to do so). By not migrating to a more highly automated invoice process, AT&T maintains inefficiencies in its audit process.

Avalon Global Solutions (AGS) is based in Hampton, Virginia, United States. It is a provider of life cycle communications and security solutions to users and TEM vendor partners. AGS focuses on managed services and process outsourcing solutions for fixed and mobile service environments. Its service offerings cover the entire TEM life cycle. In a very short time, AGS has expanded its portfolio of communications-centric offerings.

Gartner thinks AGS is best placed to handle North America-based expenses for companies with a fixed and mobile services budget of $50 million or less, or for North American companies with no more than 20,000 handsets.

• Ordering and provisioning are a core competency of AGS, as it focuses on and excels in logistics and help desk solutions. Its help desk services support 400 device types across multiple networks and applications, such as mobile CRM and mobile virtual private networks.

• AGS's organic logistics capabilities contribute to a consistently strong satisfaction level among its customers.

• AGS is considered the leading provider of TEM services to the U.S. federal government. It received a nomination for contractor of the year in 2010 from the U.S. Department of Transportation.

• Improving indirect channel partnerships have the potential to bring more AGS services and solutions to market, both domestically and internationally.

• AGS receives much higher marks from customers for mobile TEM services than for fixed TEM services. Overall, customers are satisfied with their relationship with AGS, but do not characterize it as exceeding their expectations.

• Rather than build organic capabilities outside North America, AGS has used partnerships to appeal to TEM customers worldwide. This strategy has been tried before in the TEM market — and it has not worked well when small partner-based ventures have tried to compete in highly competitive, price-sensitive markets.

• Although AGS meets Gartner's criteria for geographic diversity, the bulk of its business is with North American companies. For companies with significant operations in Europe and Asia/Pacific, AGS does not present a compelling value proposition.

Avotus is based in Mississauga, Ontario, Canada. Its TEM business is a mixture of self-service and call-accounting applications, managed services, and process outsourcing for fixed and mobile service environments. Avotus's solutions cover the entire TEM life cycle.

Gartner thinks Avotus is positioned primarily to handle North America-based expenses for companies requiring TEM solutions for managed expenditure of less than $75 million, or for up to 40,000 handsets.

• Avotus is the only TEM company that aggressively markets an e-procurement service based on its own service delivery platform. This can enable much greater cost avoidance.

• Avotus has spent the past 24 months working with its service delivery partner, ConJoin Group, to stabilize its customer base. The move to "offshore" many day-to-day operations was a significant one to improve the company's cost structure and greatly enhance its long-term viability.

• Although Avotus's customer satisfaction level has improved, significant dissatisfaction remains. The transfer of accounts to third-party, offshore management continues to cause consternation. Customers complain about poor account management, with reference to "too many individuals handling our accounts, so that there is not good general knowledge of our requirements," a "lack of communication with us — they don't ask questions enough" and general dissatisfaction with a persistent "language and knowledge barrier that is hard to overcome."

• Avotus lacks any significant partnerships for an indirect channel to market.

• Although Avotus meets Gartner's criteria for geographic diversity of spending and devices under management — having demonstrated some capabilities in Latin America — the bulk of its business is with North American companies.

CSC is based in Falls Church, Virginia, United States. It is one of the world's largest outsourcing companies and was the first traditional outsourcer tracked by Gartner to invest in TEM service capabilities. CSC has served its global customer base with TEM services for seven years. The company is unique among large outsourcers and CSPs in placing few restrictions on its pursuit of TEM-only deals. Other large competitors will not engage TEM opportunities where there is no existing services base.

Gartner believes CSC is an appropriate choice for TEM process outsourcing solutions, irrespective of region, service environment or the amount of customer spending.

• CSC has invested in four global service centers, from which it provides TEM services. These centers are located in the U.S., the U.K., India and Australia, and there are over 75 business analysts and account managers dedicated to TEM services.

• CSC is one of the few large IT and process outsourcers willing to take TEM-only deals.

• CSC has the outsourcing experience and size to provide attractive financial restructuring choices, including contract novation for services and mobile assets. CSC may engage in contracts involving financial-compensation-based gain-sharing agreements to secure targeted savings in communications, while also reducing upfront investment in solutions.

• Many customer complaints against CSC indicate that it often fails to offer all the benefits of fully outsourced telecom outsourcing, and instead focuses on low-value rebilling and invoice loading.

• CSC was unable to provide Gartner with reference customers willing to undertake a survey to determine their satisfaction. A base of reference customers contributes to Gartner's assessment of a provider's Ability to Execute, and CSC's rating reflects its lack of participation here.

Ezwim is based in Amsterdam, the Netherlands. Its TEM business focuses on providing self-service applications to aid cost avoidance relating to mobile services and assets. Ezwim enables partners to use its platform-as-a-service delivery engine. Ezwim's solutions provide summary-level invoice audits and cost allocations. Its platform supports more devices in Europe than any other vendor. In our conversations with Europe-based companies, Ezwim comes across as a likely candidate for companies considering a self-service solution, but not for full process management solutions.

Gartner believes Ezwim is best placed to serve Pan-European companies that maintain some service contracts and assets in North America.

• In 2009's MarketScope we identified tepid support for Ezwim from its customers, but this year's customer interactions reveal a marked improvement in their satisfaction. Gartner now considers Ezwim's customers to be fully satisfied.

• Customers declaring high levels of satisfaction refer to the depth of detail relating to contract information and the granularity of transaction-level invoice validation. Customers also continue to value the ability to model "what if?" scenarios for contract negotiations.

• Ezwim is not a process outsourcing company. It delivers some level of "managed service" by providing invoice data loading and management on behalf of its customers. Ezwim does not provide value-added services such as ordering, dispute resolution, help desk or payment services.

• Although Ezwim meets Gartner's criteria for geographic diversity of spending and devices under management, the expenses and assets it manages are almost exclusively Western European, with only a very small amount of business conducted in North America. Ezwim has no business base in Asia/Pacific or Latin America.

HCL Technologies is based in Noida, India. This is its second Gartner rating for the TEM market. In our 2009 TEM MarketScope we noted concerns about HCL's acquisition of Control Point Solutions (CPS), as Gartner considered CPS to be a distressed provider. These concerns have not diminished. Judging from HCL's visibility in the market and Gartner's discussions with its customers, HCL has been unable with TEM to emulate the success it has had in other business process outsourcing (BPO) markets. Although customer satisfaction with HCL has improved slightly since the last TEM MarketScope, there remain points of dissatisfaction that have a big impact on customer loyalty. Gartner considers HCL's customer base to be in jeopardy.

Given HCL's size and experience in the BPO market, Gartner's view is that it may be considered in a competitive bid to service global expenses for large MNCs, irrespective of their spending on fixed services or the number of handsets to be managed. But HCL should not be considered for sole-source contracts.

• For fixed TEM, users continue to rate HCL positively for cost benefits relating to customer service, cost reduction from better service management, better visibility of costs based on chargeback/allocation capabilities, and reduced load on the finance team because of vendor payment services.

• HCL is a competitive global player in IT and BPO, with the ability to add TEM solutions as part of broader outsourcing engagements.

• Mobile TEM customers see weakness in HCL's ability to provide effective monthly invoice audits. They also have doubts about its ability to deliver cost savings from head count reduction and resource reorientation.

• Customer feedback points to significant concerns about HCL's telecom expertise across fixed and mobile services. Customers also point to gaps in HCL's solution implementation skills and capabilities.

• Gartner remains concerned about the viability of HCL's TEM organization, given its legacy and continued poor performance. Recent management changes within this organization raise more doubts about its long-term viability within HCL, as well as in the market.

IBM is based in Armonk, New York, United States. It is the world's largest outsourcing company. Since Gartner's last TEM rating document, IBM has diversified its formal TEM partners by including Tangoe for both its TEM and MDM service platforms. Based on customer preferences, IBM also works with Rivermine. IBM "private labels" a number of small service delivery partners' offerings to fulfill the full life cycle of TEM services. IBM now faces more aggressive challengers such as CSC and Vodafone.

Gartner believes IBM Global Technology Services is an appropriate choice for TEM process outsourcing solutions, irrespective of region, service environment or amount of customer spending.

• Gartner considers IBM's strengths to be in bringing legacy project and program management skills to large, multinational TEM opportunities.

• The company has taken an aggressive approach to securing TEM opportunities by guaranteeing that relationships are cash-positive, including prepayment of anticipated savings.

• IBM has the outsourcing experience and size to provide attractive financial restructuring choices, including contract novation for services and mobile assets. Additionally, IBM will engage in contracts where financial compensation is based, wholly or partly, on gain-sharing agreements to secure targeted savings in communications, while also reducing upfront investment in solutions.

• Customers looking for leading-edge solutions that integrate TEM financial management capabilities with traditional IT operations management solutions (such as Tivoli) and unified communications as a service will find IBM an appealing and capable partner.

• IBM provides services worth over $2 billion to, and manages nearly 500,000 mobile devices for, global customers, in more than 20 languages.

• IBM's pricing is higher than that of many of its competitors. Customer feedback reveals dissatisfaction with the value of the services received for the prices paid.

• Although IBM does maintain some consulting and help desk resources relating to TEM solutions, it mainly competes on the basis of multiple TEM service platforms and by leveraging the service capabilities of many small, niche telecom vendors. Customers should understand the service supply chain of IBM's service offerings. Especially when paying a premium, they should expect more "organic" IBM resources to be used, to reflect the expertise and vertical-market acumen of this global outsourcer.

Invoice Insight is based in Manassas, Virginia, United States. It is one of the most stable providers of TEM services. Although it shows slower revenue growth than some of the market leaders, Gartner continues to see Invoice Insight competing for a broad range of spending, from less than $5 million to hundreds of millions of dollars. Invoice Insight competes with a portfolio of services focused on extending its hosted service platform, managing carrier data, tracking inventory, and providing services for both fixed and mobile life cycle management.

Gartner believes that Invoice Insight is best placed to provide managed TEM services for the global expenses of large MNCs, irrespective of the amount of spending on fixed services or the number of mobile handsets to be managed.

• Feedback about Invoice Insight's fixed TEM services and perceived cost benefits indicates that customers are highly satisfied.

• For mobile TEM services, Invoice Insight's customer satisfaction score was also very good.

• Although Invoice Insight is a relatively small player, Gartner is encouraged by the strength of its management and operations. Invoice Insight is profitable, which cannot be said of some of its larger competitors.

• Invoice Insight lacks productive partnerships to provide an indirect channel to market.

• Although Invoice Insight meets Gartner's criteria for geographic diversity of spending and devices under management, the bulk of its business is with companies in North America. It has, however, demonstrated some capabilities elsewhere.

MDSL is a provider of TEM services based in London, United Kingdom. MDSL's TEM business of selling services and applications resulted from the company branching out from its core business of developing applications that manage market data expenses for large financial trading institutions.

Gartner believes MDSL is best placed to provide TEM process outsourcing for large Europe-based MNCs that have a small percentage of service contracts and assets across geographies.

• MDSL maintains one of the most diverse bases of services and assets under management in terms of distribution across geographies.

• Feedback about MDSL's service quality is good overall, and in conversations with customers we hear of strong satisfaction with its "point" TEM services in both fixed and mobile environments.

• MDSL consistently reinvests in its platform in terms of research and development — as, for example, in its recent development of Internet Protocol telephony off-net cost management, workflow and Web 2.0 features.

• MDSL's highest rating is for its consulting and advisory services relating to negotiations with CSPs.

• Our conversations with MDSL customers reveal recurring complaints about implementations taking longer than promised. There is also a perception of inflexibility in terms of account management and program management. This suggests that companies engaging MDSL should be mindful of standard terms and conditions to avoid dissatisfaction and change orders.

• MDSL lacks productive partnerships to provide an indirect channel to market.

ProfitLine is based in San Diego, California, United States. It is one of the largest providers of telecom process outsourcing services for fixed and mobile environments. ProfitLine leads the market in terms of investments in Six Sigma disciplines across the organization. This attention to detail has yielded a significant increase in customer satisfaction since Gartner's last MarketScope for TEM. ProfitLine also holds a U.S. General Services Administration (GSA) Schedule 70 contract, is part of the Federal Strategic Sourcing Initiative (FSSI), and services multiple government agencies.

Gartner suggests ProfitLine for all process outsourcing opportunities, fixed and mobile, based in North America, irrespective of spending or number of devices.

• No TEM company has improved its market perception more during the past year than ProfitLine. Gartner analysts have seen ProfitLine progress from one of the most complained-about TEM providers to nearly disappearing from ad hoc inquiries from dissatisfied clients. The focus of ProfitLine's executive team on improving customer satisfaction has been exemplary, and although the CEO has now departed, the rest of the executive team responsible for this improvement remains in place. In Gartner's formal conversations and reference surveys no single "point" service, for fixed and mobile services, received a rating below "satisfied," and most achieved a rating of "expectations exceeded."

• ProfitLine's partnership with BT is producing revenue and exposing it to large opportunities.

• ProfitLine has one the longest records of serving the telecom process outsourcing market. It delivers against committed service levels using highly structured processes and methodologies, while maintaining "black belts" and "green belts" for process guidance and process engineering.

• ProfitLine is not yet profitable, despite having received significant external funding, and it recently replaced its CEO for the second time in four years. Despite a strong improvement in its perception by customers, ProfitLine has done very little marketing in this regard. These factors could raise concerns about its corporate viability.

• Although ProfitLine meets Gartner's criteria for geographic diversity of spending and devices under management, the bulk of its business is with North American companies. It has, however, demonstrated some capabilities elsewhere.

• Other than its partnership with BT, ProfitLine lacks productive partnerships to provide an indirect channel to market.

Rivermine is based in Fairfax, Virginia, United States. It provides a full range of TEM solutions for fixed and mobile environments. It continues to increase its sales faster organically than the providers with the highest revenue, and it continues to win some of the biggest deals. Rivermine is a strategic partner of IBM Global Technology Services, Accenture and others, to bring TEM solutions to large MNCs.

Rivermine should be considered for all regional and global TEM opportunities, fixed and mobile, irrespective of the level of spending or the number of devices.

• Rivermine receives strong marks from customers for the way it has integrated its acquisitions, in terms of personnel, processes and platforms.

• Rivermine is proving effective at selling to very large MNCs, irrespective of their self-service requirements. This is thanks to the use of its process outsourcing capabilities and the applications it has acquired.

• Rivermine is providing global services and can point to a very geographically diverse base of services and assets under management.

• The Rivermine process outsourcing services that attract the most positive comments include customer service and account management, an area that is a shortcoming of many TEM providers.

• In competitive bids Rivermine's prices are often higher than those of its nearest competitors.

• Some customers acting as formal references, or that have had ad hoc conversations with analysts as part of Gartner's inquiry service, express dissatisfaction with the length of time required for, and other problems associated with, solution implementation and preliminary invoice characterization.

Based in Dallas, Texas, United States, the TEM division of Symphony Services provides a fully integrated fixed and mobile TEM application for customers wanting licensed or managed services and process outsourcing services. In aggregate, customer feedback shows that Symphony generally satisfies its customers.

Gartner believes that Symphony is an appropriate choice for all TEM solutions, regardless of geographic region, service environment or level of spending.

• Symphony consistently invests in innovations in adjacent markets to add value to its process outsourcing services. MDM services form the adjacent market for Symphony's development and resource investments.

• Symphony is the market leader in terms of investment and distribution of resources and service centers in support of MNCs. Symphony also supports a very geographically diverse base of services and assets under management.

• Symphony has proven effective at creating partnerships to provide a robust indirect channel to market.

• For fixed TEM services, reference customers voice dissatisfaction with Symphony's inability to meet, or improve, service-level agreements associated with better ordering and provisioning.

• Formal and ad hoc discussions with reference customers reveal dissatisfaction with the length of time required for, and other troubles associated with, solution implementation.

• For mobile TEM services, customers express dissatisfaction with the development and operationalization of service catalogs. Similarly, several customers have complained about Symphony's ordering and provisioning functionality for fixed TEM services.

Tangoe is based in Orange, Connecticut, United States. It is the largest TEM provider, and continues to work to tie the TEM services market to the MDM services market. The company has had some success in bundling TEM and MDM services, but the acquisition of customers has meant some sacrifice of price and margin. Tangoe's satisfaction ratings have improved during the past 12 months for both fixed and mobile TEM services. Earlier in 2010, Tangoe filed an S-1 registration to take the company public.

Given the breadth of its customer base and solutions, Gartner believes that Tangoe is an appropriate choice for TEM process outsourcing services, irrespective of region, service environment or spending level.

• Tangoe maintains the broadest range of customers, and has more telecom services and assets under management than any of the world's largest IT and process outsourcing companies. Tangoe is able to use the knowledge and experience it gathers from its customer base to provide appealing bundles of software and services. The company consistently receives high ratings from customers for the depth of its telecom and related business expertise.

• Tangoe has proven it can expand its capabilities aggressively through internal development and acquisition. Tangoe's MDM services, though still not accounting for a significant percentage of its revenue, are the most likely to help it branch into adjacent markets and change its image from TEM provider to broader IT and process services provider.

• Tangoe has proven its ability to deliver on a global scale, based on its level of international telecom services and assets under management and the services it provides to large MNCs.

• Tangoe is the most competitive company in terms of pricing for fixed and mobile TEM services.

• Some new and some long-standing customers have commented that Tangoe seems like three different companies. Some of those implementing all of Tangoe's service lines find they sometimes have to deal with the three services groups brought about by past acquisitions. Tangoe must continue to address this issue.

• At one time, Tangoe had the most visually appealing user interface and the most intuitive workflow in the TEM market. But Tangoe's transition from an independent software vendor to an on-demand, technology-based business process outsourcer has turned its development efforts elsewhere, leaving its portals and self-service modules looking dated.

• Although Tangoe's pricing is extremely competitive, the company protects its margin through post-agreement changes in the scope of work. Customers should understand the implications of change orders for service costs before making significant changes to their service arrangements.

Telesoft is based in Phoenix, Arizona, United States. It is a multifaceted TEM provider offering application functionality and a range of services relating to fixed and mobile environments. Gartner still sees Telesoft in as many pure call-accounting deals as TEM deals, but the company continues to grow its TEM business, albeit at less than the market rate.

Gartner suggests Telesoft for companies with up to $75 million in global fixed telecom spending or up to 20,000 devices in North America only. Companies wishing to engage Telesoft for international device management should work closely with it to understand its investments in regional capabilities in 2010.

• Telesoft receives consistently strong customer references for its expertise relating to call-accounting and broad usage management requirements.

• Telesoft can combine TEM process outsourcing and legacy call-accounting outsourcing in a very competitive package.

• Since Gartner's last TEM rating document, Telesoft's investment in its service delivery platform as a percentage of revenue has outpaced that of most of its competitors. Telesoft is one of the few providers with Microsoft Lync expense management capabilities.

• Although Telesoft receives strong marks from reference customers for service delivery quality, the same customers voice doubts about the value of Telesoft services.

• Although Telesoft meets Gartner's criteria for geographic diversity of mobile devices under management, the bulk of its business is with North American companies. It has, however, demonstrated some capabilities elsewhere. This narrow focus reduces its scores for Ability to Execute and Completeness of Vision.

• Telesoft does not meet Gartner's criterion for geographic diversity of fixed service contracts under management, as the company is so focused on North American companies.

TNX is a Dutch company with headquarters in Santiago, Chile and Buenos Aires, Argentina. It is a TEM process outsourcing provider and telecom consulting company. Most of its experience is in the financial services and consumer goods and retail markets, but its client portfolio extends to the energy, healthcare and manufacturing industries. TNX maintains branches in Chile, Brazil and Mexico, and supports business customers in over 20 countries, including the U.S. and Canada. Its approach is consultative and focused on improving and, where necessary, re-engineering internal processes to implement TEM solutions, including IT services. Due to language barriers, only a few TNX customers provided feedback in Gartner's customer satisfaction surveys.

Based on TNX's approach to the market, geographic coverage, and reinvestment in its platform and resources, Gartner believes this provider is best suited to offering fixed, mobile and data TEM solutions across Latin America, irrespective of the customer's fixed telecom spending or the number of corporate handsets to be managed. For opportunities outside Latin America, where TNX is a newcomer, Gartner suggests that prospective customers conduct rigorous due diligence to test its performance.

• Feedback from customers indicates that they value TNX's skills in reducing telecom expenses and TEM support capabilities.

• TNX has improved customers' satisfaction with its TEM services relating to help desk and the ordering of mobile assets.

• TNX continues to invest resources in developing its service delivery platform and in its service delivery resources.

• Although TNX meets Gartner's criteria for geographic diversity of spending and devices under management, the bulk of its business is done in Latin America. It has demonstrated some capabilities elsewhere.

• Prospective customers are advised to question the scalability of TNX's operations, where the number of North American and European mobile assets to be managed exceeds 10,000.

Vodafone Global Enterprise is based in London, United Kingdom. It is the newest and most intriguing entrant to the TEM market analyzed in this document. In just over 18 months it has gone from being a TEM nonentity to the odds-on favorite to become the global powerhouse for TEM services. That said, it has a long way to go before it can be crowned. The market first got a sense of Vodafone's capabilities when it won a five-year deal with DHL, which included a converged TEM and MDM service — the offering being called Vodafone Telecom Management (VTM). Vodafone Global Enterprise then made its ambition clear by acquiring two TEM companies: Quickcomm and TnT Expense Management.

Gartner believes Vodafone Global Enterprise is an appropriate choice for TEM process outsourcing solutions, irrespective of region, service environment or amount of customer spending.

• Vodafone Global Enterprise receives high marks for customer satisfaction for fixed and mobile TEM services. Gartner characterizes the customer base as fully satisfied and believes it is becoming loyal.

• Vodafone Global Enterprise is increasing its presence in the market aggressively, and presenting customers with broad value propositions. It is now able to provide consulting and advisory services, in addition to process outsourcing.

• Vodafone Global Enterprise has made significant investment in its service delivery platform through its acquisition of Quickcomm, and it has invested to integrate TEM functionality with MDM services. The acquisition of TnT provides the company with one of the highest-rated TEM service providers of the past two years. TnT also brings very strong experience of dealing with Fortune 500 clients — Vodafone Global Enterprise's target market.

• Vodafone Global Enterprise will engage in contracts where there are financial-compensation-based gain-sharing agreements to secure targeted savings in communications, while also reducing upfront investment in solutions. Vodafone's willingness to novate service contracts, to become the customer of record, across over 100 countries provides a very compelling financial structure for MNCs.

• Vodafone Global Enterprise faces significant challenges to integrate its two TEM acquisitions, especially the services arm, TnT. Also, TnT's services business was less than half the size of those of some of its largest competitors, and the company was growing by only single-digit percentages year over year. TnT's processes and methodologies now face a potential flood of business, which will test the scalability of its processes, methodologies and personnel.

• Vodafone's joint venture with Verizon prohibits it from directly marketing service contracts in the U.S. Although Vodafone Global Enterprise can directly market TEM services in the U.S., the inability to directly market bundled packages there could impact its value proposition in the short term.