Top tips for controlling mobile spending

For many companies, supporting an increasingly mobile workforce requires the largest chunk of communications budget. In fact, Analyst firm Aberdeen Group estimates that it costs up to 10 times more to manage mobile services and devices than it does fixed-line services and, as a consequence has advised companies to budget ten times more for operational support of mobility services. There can be no doubt that the costs are rising, as Gartner research vice president, Phillip Redman, attests. He reckons that enterprises have seen their mobility costs increase by 20-35% over the last five years - even as mobile and wireless charges themselves continue to decline. The reasons for this are; growth of international voice and data services, more mobile users being supported, an increased number of services on offer and the continued lack of effective user management.

This pattern looks set to continue with AOTMP, a provider of information solutions for managing telecom and IT environments, reporting that in the last year distribution of cell phones has decreased by 9%, while the distribution of smart phones has increased by 6%. Spending on mobile Internet and mobile data will inevitably rise as a consequence of this and AOTMP points out that the last year has also seen a 50% increase in the quantity of unique mobile applications deployed. Enterprises now have no choice but to establish wireless mobility management programs to meet their service and cost targets, according to AOTMP's Timothy Colwell.

Colwell has a point. Aberdeen Research calculated last year that effective Wireless Expense Management (WEM) can save enterprises US$276 per mobile user each year - that's a saving of approximately 42% on a typical organization's annual wireless data service plan. Other experts suggest savings in excess of US$300 per user per year can be achieved.

So, as usage increases, how can enterprises ensure their costs don't spiral out of control?

Many employees take the executive decision to use paid-for Wi-Fi in coffee shops or purchase HSPA dongles, and then claim back the subscription or usage costs on their expense accounts. This can make it extremely difficult to track what is actually being spent on such services and perform an analysis of cost-vs-value. In addition, buying access in an ad-hoc manner will be typically more expensive than using a company-wide scheme. For instance, a one-time Wi-Fi subscription costing a few dollars that is claimed back by an employee compares unfavorably to a commoditized wireless access package provided to the enterprise as part of a bundled package of data from their service provider. Mobile data costs could be reduced by as much as 50% by insisting employees use a bundled, Wi-Fi package from the enterprise's network service provider. Using such a package, one organization's global fleet of 1,200 mobile workers saved €30,000 on Wi-Fi expenses in a single year. In addition, a lack of policy in regard to Wi-Fi access gives rise to security concerns as well as inconvenience caused by inconsistent service quality and ease of employee contact. 

Although it is undesirable to institute a total ban on personal calls in terms of maintaining good employee relationships, there is considerable scope to cut costs by instituting a clear policy on the matter. Ezwim, a telecom management ASP, estimates that 20% of all mobile calls are personal and has found that the most expensive time periods for calls are between 5pm and 7pm - when many employees are on the commute home. 

Individual users, groups or departments going it alone to strike mobile deals means enterprises miss out on massive economies of scale and potentially special offers that are made available to large mobile fleets. It's not uncommon for providers to offer competitive bundles for large volumes of voice and data at attractive rates. Gartner reckons that, as enterprises use more applications, costs per user can be as high as US$140 per month, whereas a bundle that takes full advantage of corporate purchasing power can see that figure fall to under US$100. Added cost savings that can be delivered by centralized procurement include greater minimum annual commitment (MAC) discounts, cheaper calls to and from users on the same provider and reduced administration costs for managing a single provider.

As mobile fleets transition to smartphones, the average price of a device to an enterprise has increased four-fold. As a consequence, significant costs can be saved by limiting the number of smartphones in an enterprise fleet. However, this remains a situation in which it's important to ensure the right employees have the right equipment. Road warriors clearly have the need for such equipment whereas desk-based workers don't need smartphones so much. Considering that the top 10% most intensive mobile users (typically of the road warrior class) are responsible for half of the typical enterprise mobile spending budget, there's a strong case for effective segmentation of the workforce.

At desk mobile usage, whereby employees use their mobiles instead of the perfectly good landline phone within arm's reach, is an obvious source of unnecessary cost. As fixed-mobile communications and femtocell technologies improve, these costs can be eradicated by the provision of softphones or smartphones that will serve as employees' only device and connect using the cheapest method. That may be 3G when the employee is out and about but, in the office, the call will be routed over the traditional phone network at radically reduced cost.

Voice roaming costs have fallen in recent years, particularly in Europe when the EU imposed price setting. Nevertheless, analyst firm Ovum thinks that any benefit received as a result of recent regulatory intervention will have been wiped out by increased usage and data roaming in particular. In order to avoid the horror stories of bill shock from mobile broadband roaming, enterprises should set strict guidelines and, potentially, limits as to who should use data while roaming and how often they should use it. Voice roaming costs should be carefully managed by agreeing deals in advance with providers.

A fatal error would be to control costs so tightly that your users don't feel they can use mobile as much as they need. By throttling usage too tightly and limiting access to devices with necessary features, the productivity benefits of the technology can be missed. However, the balance between cost and value is a fine one. While it is relatively straightforward to measure cost, it is difficult to quantify the business value and put that onto a balance sheet. Enterprise mobility cost management must take a more exhaustive approach than simply assessing lines on a balance sheet. 

It's important not to lose sight of the cost benefits of mobility in the rush to save on expenditure. One large organization has reported immediate savings of €1.1 million in operating expenses and savings of €6,100 per mobile user per year. This was achieved by a introducing desk-sharing solution, which in turn reduced the company's  real estate requirement. The per user cost saving has been achieved through effective use of mobility and, although that mobility will have come at a cost, it will have been outweighed by the non-communications related savings it has made as a result.