Eliminate Wireless Communications Expenses by Leveraging People Interaction

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1 An Insider s Guide to Containing Wireless Communications Expenses The Problem For modern businesses to succeed, employees must always be available to their customers and to one another. To achieve this, many companies are turning to mobile and wireless communications technologies to stay connected. While this flexibility can help a business grow and succeed, it can also have a significant impact on the bottom line. In recent years, business expenditures for mobile communications technology have exceeded the costs of traditional landline voice communications. While these new expenditures are seen as simply the cost of doing business today, many companies do not realize how easily these costs can grow out of control. Much of the cost for wireless communications technology can be easily brought into line by gaining visibility into inventory and usage. Unfortunately, many companies find it difficult to take back control of their mobile communications expenses. Through our work with several industries and many Fortune 500 companies, Avotus has identified specific problems associated with mobile usage and adopted best practices to help companies manage the associated costs. It is estimated that as much as 20% of the workforce uses some form of mobile/wireless communications technology in their daily duties. However, it is also estimated that 70% of those employees make their own decisions when purchasing mobile devices and plans. This means workers can choose devices and plans which may not best suit them or the needs of the company. With options like gaming packages, internet access, and flashy new devices, it is tempting for employees to make the wrong decision, especially when considering that fact that most companies foot the entire bill generated in their name. Some companies have taken an early containment step by limiting the choices available to their employees through universal plans and pre-approved devices. However, limiting their selection only curtails part of the problem. Since some estimates suggest that up 25% of mobile calls on business assets are non-business related, even the least expensive plans or devices can cost businesses a fortune in unplanned, out-of-control expenses.

2 Solving the Problem When Avotus engages a new Wireless Communications Usage Management customer, we begin the process by asking a series of questions (see below). The responses below provide an insight into the magnitude of the problem. While most companies believe they have control over their expenses, probing generally proves this false. Identifying the Problem Question Typical Answer Problem How many wireless communications devices are in use within your organization? What is the average monthly bill for your mobile employees? Do you have a corporate wireless communications policy? What is your average per minute usage cost? Are your employees misusing corporate assets? What departments or users have mobile devices, but don t require them? Are you paying for unused or idle mobile assets? I have no idea, or a ballpark guess. A ballpark guess, usually far lower than the actual expense. Yes. No idea. Can only detect the most flagrant violations. Phones are often given to employees who request them. Don t know. Companies do not have tools to investigate or manage inventory or the personnel to administer a system of organization. No visibility into departmental or individual usage or even the ability to aggregate overall costs. No ability to enforce the policy. No breakdown of usage by time (Night, Day, Weekend) and the corresponding rates, and no visibility into overage charges. Misuse is not always intentional abuse. For example, calling corporate 800 numbers from corporate cell phone costs the company twice. No judgment or policy was made as to whether a cell phone is critical to a job function or department. An inventory has not been conducted. Phones may be sitting in desks or might have been taken by former employees when they left the department or company.

3 As you can see, usage management of wireless communications is a complex issue leaving many companies unsure where to begin as they try to get a better understanding of their mobile communications costs. In addition to the problems above, many companies face the problems of validating bills, tracking and recovering assets, negotiating contracts, and allocating costs. To make the problem even more complex, in many instances, mobile communications charges are paid through an organization s travel and expense (T&E) line. This complicates the charge back process and leaves approval with the employee s direct manager, not the corporate telecommunications department. This means that there is no standard practice to understand and manage a company s mobile expenditures. It Starts with Inventory For companies with dozens, hundreds, or even thousands of devices, performing an inventory can be the biggest hurdle standing in the way of rolling out a mobile expense management program. In fact, sometimes the hurdle is so big, few companies attempt to get the ball rolling and those that do abandon the project prior to completion. To make the collection of inventory information less painful, a process needs to be put in place where the employees are directly engaged in the inventory process. For example, a simple questionnaire sent to each employee within the organization will help gather some basic metrics on overall usage. These questions may include: Who is your provider? What device do you currently use? What plan do you subscribe to? What was the number of minutes used on your most recent statement? What were the total charges from your most recent statement? Gartner Group estimates that only 10% of organizations have sufficient visibility into their wireless spending to enforce corporate usage policy or save on monthly expenses by optimizing employee rate plans Peter Firstbrook Gartner Group This immediately provides actionable information and a baseline. The company can now attempt to identify devices with no owner, no usage, and/or excessive usage. In addition, by aggregating devices, plan usage and costs, the company can approach vendors to leverage corporate buying power to negotiate preferred pricing.

4 The next issue to resolve is to determine if centralized or individual rate plans are the better solution. At Avotus we believe that centralized rate plans are better. Here are some pros and cons of individual rate plans as compared to centralized rate plans. Centralized Rate Plan + Provide accurate metrics to get the best deal + Reduces the administrative burden + Allows personal call chargeback + Facilitates client billback + Identify unintentional (or other) misuse + True corporate wide consolidation + Strategic sourcing + Consolidated billing Decentralized Rate Plan Propagates highly decentralized cellular model No way to take advantage of bulk plan discounts Increased administration efforts from managing multiple plans / carriers Cost of educating users on best way to use new rate plans Changing plans can cost money and extend terms Administrative charges Early contract termination penalties Leaves the supplier in charge Customer Case Brief Recently, a large North American equipment rental company wanted to gain control of their wireless spending. With more than 700 locations across the continent and a highly mobile workforce, the majority of employees were assigned some type of wireless device. The company estimated their annual wireless spend at approximately $16 M. This cost was more than four times greater than their landline spending. The company had completely decentralized their wireless management to the point where: Employees chose and changed their own plans There was no central inventory There were no corporate rates There was no visibility into usage or expenses The company estimated their annual wireless spend at approximately $16 M more than four times greater than their annual landline spending

5 With help from Avotus and upon migrating to the Avotus Wireless Intelligent Communications Management platform, the customer immediately discovered a multitude of problems with their wireless program that needed to be addressed: What They Found Many zero usage cell phones These were cell phones that were being paid for, but were sitting in a drawer not being used. Inventory discrepancies Multiple phones were assigned to single employees. Abuse Corporate cell phones had been handed out to nonemployees or were being used exclusively for personal use. Vendor issues One of the equipment rental company vendors had taken steps to make sure the client did not find out exactly how many cell phones they had. This meant that the client could not leverage their buying power. Inappropriate ownerships Some legitimate mobile employees required high quality service but had poor quality cell phones while others who did not require the high quality of the expensive phone had the more expensive, higher quality cell phones. Physical abuse Due to the physical nature of duties for many employees, it was discovered that many workers often brought expensive equipment to job sites, and performed inspections and climbed onto equipment while wearing the devices. This resulted in numerous cell phones being repaired or replaced without consequence to the responsible employee. Results With the capabilities of the Avotus Intelligent Communications Management Wireless Accounting Module, the company now has a universal view of all corporate wireless spending and assets. By gaining a greater understanding of their spend rate, they are able to leverage their buying power to create a custom shared minutes plan with a different vendor. Also, branch, district and regional groups have visibility into the spend rate; quarterly budget reviews are easier to prepare and execute; and forecasting and budgeting is more accurate. Finally, with employees aware that the company has taken control of their wireless spending, abuse and misuse is on a rapid decline. In addition, with a tighter control on usage and inventory, the customer is now able to confidently move forward with new wireless technologies like BlackBerry devices and other Mobile Enterprise Applications. After only six months using the Avotus solution, the company has gained control of 46% of their cellular phones. Further, even after six months, the savings recognized totals almost $1.2 M or 13% of their total wireless communications annual spend and that s only half their wireless assets.

6 Conclusion Mobile communications can help employees become more effective. Unfortunately, the business gains reaped by a mobile workforce can easily be outstripped by the associated costs. It is increasingly important for companies to take control over their wireless infrastructure and usage in order to manage the costs and effectiveness of mobile technology. About Avotus Avotus is an award-winning provider of Communication Lifecycle Management solutions. Avotus provides both wireline and wireless solutions that manage enterprise communications assets and services and tackle challenges, including planning and sourcing, procurement and provisioning, invoice and usage management, expense allocation, and asset decommissioning and asset disposal. In the business of providing excellence to clients for over 30 years, Avotus serves over 1000 customers across 41 global destinations, many of which are industry leading Fortune 2000 customers. For more information on Avotus products and services, visit or call AVOTUS-1. For Avotus news and updates, follow AvotusCorp on Twitter, and Avotus Corporation on LinkedIn and Facebook. Gartner Group estimates that only 10% of organizations have sufficient visibility into their wireless spending to enforce corporate usage policy or save on monthly expenses by optimizing employee rate plans Peter Firstbrook Gartner Group