Rising Costs in the Mining Industry, Energy Sector: The Need for Total Expense Management (TEM)

total expense management, TEM, mining industry, energy sector

In 2023, inflation has driven an array of business decisions from massive layoffs to increasing the need for cost optimization. The mining industry—and the U.S. energy sector as a whole—is no exception, and this industry faces the added challenge of being volatile to local and federal government regulations. In fact, just a few weeks ago, the Biden administration announced its plan to raise the cost of drilling on federal lands for the first time since 1920. According to the New York Times, the Interior Department estimates that “the new rule, which would also raise various other rates and fees for drilling on public lands, would increase costs for fossil fuel companies by about $1.8 billion between now and 2031.” 

This is not all. GlobalData also predicts that “in 2023, across the leading 20 companies tracked, a similar rise is expected at 11.6%, with collective capital expenditure of $71.6bn, with miners continuing to [prioritize] investment in critical minerals as well as [decarbonization] efforts.”

Compounding, unavoidable expenses put mining, oil, and gas–the backbone of the United States energy sector–at risk, reinforcing the need for expense management strategies that preserve the innovation of the industry in spite of these challenges. 

This is where Total Expense Management (TEM) enters the space.

What is Total Expense Management (TEM)?

Total Expense Management (TEM) is a comprehensive approach to managing all of a company’s expenses. It encompasses all aspects of expense management, from policy development to reporting and analysis. TEM helps businesses to control costs, improve compliance, and make better financial decisions. Whereas other cost management strategies might be limited to one pillar, like telecom expense management or mobile device management, total expense management is exactly what it sounds like: the total of a business’s expenses. Cost reduction strategies like TEM are paramount in cutting unnecessary costs in an organization because there are only so many of these factors that cannot be controlled, unlike insurance and labor, regulations, commodity prices, and exchange rates. 

Learn how Teligistics slashed on Fortune® 500 energy company’s expenses from $187K to a lean $106K and cut our average device cost from $101 down to just $80!

Read the case study

How Total Expense Management Lowers Costs in Mining, Energy, and More

The extractive industries, which include mining, oil, and gas, are sectors known for their substantial capital investments, vast operations, and intricate web of expenses. As these industries evolve, the need for streamlined expense management becomes increasingly crucial. Enter Total Expense Management (TEM), a systematic approach to manage, control, and reduce business expenses. Here’s how TEM positively impacts businesses in mining, oil, gas, and related sectors:

Improved Compliance

  • Regulatory Adherence: The mining and energy sectors are heavily regulated, with stringent laws governing operations, environmental practices, and fiscal responsibilities. TEM aids businesses in maintaining a real-time record of expenses, ensuring they stay on the right side of these regulations.
  • Tax Documentation: Accurate expense tracking provided by TEM reduces the risk of tax-related discrepancies. It ensures that all deductible expenses are appropriately documented and claimed, which can lead to significant savings.
  • Auditing Ease: With a clear record of all expenditures, audits become more straightforward, reducing the time and resources spent on external audits or internal financial reconciliations.

Reduced Costs

  • Analytical Insight: Through TEM’s detailed analytics, businesses can visualize their spending habits. This visibility offers an understanding of recurrent expenses, helping businesses recognize cost-saving opportunities.
  • Expense Forecasting: Predictive analysis integrated into TEM tools allows businesses to anticipate future costs, assisting them in better budgeting and resource allocation.
  • Elimination of Wasteful Expenditures: With a clearer picture of all expenses, redundant or unnecessary costs can be easily pinpointed and eliminated.

Improved Decision-making

  • Strategic Resource Allocation: Data-driven insights from TEM can guide decision-makers on where to best allocate financial resources, be it in new exploration projects, technology investments, or operational enhancements.
  • Performance Metrics: By monitoring key performance indicators related to expenses, businesses can set tangible financial goals and strategies to meet them.
  • Enhanced Financial Flexibility: By understanding where money is spent and where savings are possible, businesses can reallocate funds to areas of growth or innovation.

Operational Efficiency and Productivity

  • Automated Processes: Automation of expense reporting and approval processes reduces manual errors, speeds up operations, and ensures that there’s a consistent methodology applied across the board.
  • Time Savings: With streamlined expense management, finance teams can focus on strategic initiatives rather than getting bogged down in the minutiae of everyday expense tracking.
  • Digital Integration: Modern TEM solutions can integrate with other enterprise software solutions, ensuring seamless data transfer and reduced operational friction.

For businesses in the mining, oil, gas, and energy sectors, TEM is not just about tracking pennies but about strategic financial management. By integrating TEM solutions, these industries can achieve better regulatory compliance, cost savings, informed decision-making, and improved operational efficiency – all of which contribute to a stronger bottom line and a competitive edge.

If you are a business in the oil and gas industry, TEM can be a valuable tool to help you save money and improve your bottom line. By implementing TEM, you can improve your compliance, reduce your costs, and make better decisions about your spending.

Business Strategies for Saving with Total Expense Management

Finding the right Total Expense Management solution begins with the right mindset. Here are some strategies for initiating the search for the right TEM solution:

  • Choose a TEM solution that is tailored to your specific needs. There are a variety of TEM solutions available, so it is important to choose one that meets your specific needs. Consider the size and complexity of your business, your budget, and your specific requirements when choosing a TEM solution.
  • Get buy-in from all levels of the organization. TEM is most effective when it is supported by all levels of the organization. Make sure to get buy-in from your executive team, managers, and employees before implementing TEM.
  • Train your employees on how to use the TEM solution. Once you have implemented TEM, it is important to train your employees on how to use the solution. This will help to ensure that they are using the solution effectively and that they are submitting their expenses correctly.

Teligistics: Empowering the Mining, Energy Sector

At Teligistics, we are committed to providing the right tools to support the mining industry and the greater energy sector. Our knowledge goes beyond telecom solutions. We help your business carefully track and analyze expenses while also helping to identify any billing discrepancies that will achieve significant cost savings for your organization. Additionally, we utilize the power of our expense management solutions to track the “E” in ESG to ensure your organization is aligned with environmental components to improve your ESG score. We provide complete visibility into your expenses in a convenient, web-based platform so that you remain in control of your data. 

Ready to get started? Request a demo today or give us a call at 800-530-1063.

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