BYOD STRATEGIES: THE COST BYOD. The. Can BYOD. decrease. mobility costs?

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1 BYOD STRATEGIES: THE COST I M P L I C AT I O N S O F BYOD The Can BYOD decrease mobility costs?

2 Introducing BYOD BYOD offers the potential for employers to increase both productivity and employee satisfaction by extending mobility to larger populations of the workforce. Most IT and business professionals assume that these benefits come only at a significant cost. Their next logical task is to determine the amount of additional cost that is acceptable to the business. But as we examine these questions, we must challenge that first assumption and instead ask: Can BYOD decrease mobility costs? $

3 The cost of implementing BYOD, which increasingly includes transitioning company owned to personally owned devices, depends on a number of factors, such as: Is there a large mobile enabled population already? How many additional employees will be enabled through BYOD? What tools & processes are in place for managing mobility? Will these change? Whether your BYOD initiative causes an increase or decrease in costs or whether it s cost neutral depends on your current state as well as your strategic intentions. Let s take a closer look at cost factors.

4 Factors that can contribute to cost savings include: ELIMINATING DEVICE PURCHASE & UPGRADE COSTS When the cost of purchasing phones, tablets and, in some cases,even laptops can be shifted to employees, the annual, per employee savings can easily be in the hundreds of dollars per employee, per year. ELIMINATING PLATFORM UPGRADE COSTS Many organizations today that have invested heavily in BlackBerry are struggling with the dilemma of their users demanding ios and Android support. Implementing a BYOD program has proven to be an effective way to migrate off of BlackBerry while allowing the employee base to cover the cost of changing platforms, saving the company $200 or more for every user. REDUCING OR ELIMINATING MONTHLY PLAN COSTS Shifting an employee from a company owned device to their own also means you ll shift a portion of the monthly service plan cost to the employee. The best practice is to establish three to five tiers of reimbursement, typically ranging from $0 to $125 per month in the U.S. and Canada. REDUCING IT / HELP DESK SUPPORT For every employee that goes BYOD rather than with a corporate owned device, activities related to device and plan provisioning are eliminated. Help desk support might also be reduced considerably for BYOD users, depending on your mobile policy.

5 On the flip side, the factors that may lead to increased expenses include: NETWORK INFRASTRUCTURE UPGRADES BYOD can open the floodgates for employee access to and the company network from their devices. Additional wireless infrastructure may be needed. SUPPORT / HELP DESK COSTS Once employees begin to work from their device, they may also expect the company to support their device. And many companies are finding it in their best interest to provide at least enough support to ensure employees can connect to the network resources. SECURITY Network security and protection against intellectual property loss will always require investment. With phones and tablets, a license fee per device is usually incurred for enterprise mobility management (EMM) or similar software to protect company data and network access. Security costs may also include services for private networks, encryption, and/or application and content management. INCREASED BYOD REIMBURSEMENT / USERS If new employees are added to the company s mobility program, there may be a new cost of reimbursement where no previous cost existed. Average monthly cost per user is still likely going down, but overall mobility costs could increase with an increase in users. PROGRAM MANAGEMENT, ADMINISTRATION & OVERSIGHT BYOD typically requires new processes, controls and oversight that will add cost. Reimbursement processes, for example, can add significant cost if you choose to use expense reports or payroll stipends.

6 What about productivity gains? According to Cisco s 2013 research report titled The Financial Impact of BYOD, annual productivity gains in the U.S. for BYOD employees range from $950 $3,150 per employee. The more mobileenabled they are (the greater their access to the company network and applications, and the ease of getting there) the higher the productivity gains. Intel claims $150 million a year in increased productivity, which averages about $7,500 per BYOD employee per year.* * Gruman, G. (2012). Afraid of BYOD? Intel Shows a Better Way.

7 Two BYOD Examples, Two Strategies A B COMPANY A: GOAL: Extend Mobility Before: 1,000 employees with corporate owned devices. Goal: Extend mobility to 2,500 employees with BYOD COMPANY B: GOAL: Cut Costs Before: 9,500 employees with corporate owned devices. Goal: Lower costs with BYOD

8 Before: Company owned COMPANY A Moves 500 of 1,000 users from company-owned to BYOD Introduces BYOD to 1,500 additional employees Stipends are offered at three levels ($0, $50, $90) based on employee role After: 1,000 users Company owned 500 users Average Monthly Cost $100 $82 Average cost of monthly plan and device upgrades $18 Security, support and overhead Average Monthly Cost $100 $82 Average cost of monthly plan and device upgrades $18 Security, support and overhead BYOD 2,000 users Goal Achieved: Average Monthly Cost $65 $47 Average reimbursement amount $18 Security, support and overhead Change in user population: +250% Previous mobility cost: $1.2 million New mobility cost: $2.16 million Change in costs: +80%

9 Before: Company owned 9,500 users COMPANY B Migrates 9,000 of 9,500 employees from company owned to BYOD BYOD employees receive a stipend of $40 or $75, depending on role No additional employees are added New systems are put in place to manage mobility, resulting in an overhead cost savings of $4 per user ($22 drops to $18). After: Company owned 500 users Average Monthly Cost $101 $83 Average cost of monthly plan and device upgrades $18 Security, support and overhead Average Monthly Cost $105 BYOD 9,000 users $83 Average cost of monthly plan and device upgrades $22 Security, support and overhead Goal Achieved: Average Monthly Cost $71 $53 Average reimbursement amount $18 Security, support and overhead Change in user population: 0 Previous mobility cost: $11.97 million New mobility cost: $8.27 million Change in costs: $3.7 million ( 31%)

10 Moving to BYOD Introducing BYOD to a large employee population involves many moving parts: COMMUNICATION It takes a well planned, coordinated effort to communicate the program, expectations and processes. ENROLLMENT & POLICY ACCEPTANCE Employees must review and agree to the company s mobility/byod policy to minimize risk and misunderstanding. Is technology in place to support this process? $ DEVICE REGISTRATION AND SECURITY To have full visibility and to reduce risk, a best practice if to require device registration and ensure the company can manage those devices remotely using software products. MONTHLY REIMBURSEMENT If reimbursement is being offered, the employer must create a mechanism for this monthly transaction.

11 Reimbursement Strategies are Paramount How a well managed BYOD program subsidizes the use of a personal device is critical and can dramatically change the economics. * Gartner A stipend is the that incents your workforce to comply with your BYOD program policies like MDM adoption. Stipend incentives ensure the success of your Policy adoption Device registration MDM enrollment Too many companies have struggled with achieving the workforce enablement benefits they sought simply because they didn t effectively use stipends. * Source: Gartner press Release: Gartner Predicts by 2017, Half of Employers Will Require Employees to Supply Their Own Device for Work Purposes, May 1, 2013, Don t let that happen to you. Design your program with appropriate stipend levels to help you achieve your BYOD program objectives.

12 Reimbursement Options for BYOD A direct to carrier payment model is the most cost effective, flexible and efficient approach to reimbursements and keeps you out of hot water with the IRS!!! Expense Control Expense Reports Stipends Direct to Carrier Payments Process Efficiency EXPENSE REPORTS This is the most common method of reimbursement today, even though expense report processing is extremely expensive (between $7 and $18 each) and lacks cost controls. How do you verify that additional data or roaming costs on an expense report are work related? Who will stop employees from putting device purchases on a report? Using expense reports also introduces variability into monthly mobility costs. PAYROLL STIPENDS Payroll stipends are predictable, automated and allow the company to budget BYOD costs. But, stipends may have costly tax implications for the employer and/or employee. Companies that use payroll stipends often have only one level of reimbursement due to the challenge of maintaining different levels in the payroll system. But in the United States, this approach can end up on the wrong side of IRS Notice , which requires reimbursements to be tied specifically to the user s job function. CASS DIRECT TO CARRIER PAYMENTS Industry analysts are recognizing that the most efficient and effective method for reimbursement is the Cass Stipend Management service featuring its proprietary, patent pending Direct to Carrier payment system. Here, the employer sends one lump payment to Cass each month and Cass uses its global electronic payment network to send the appropriate amount to each employee s wireless account with his or her carrier. The employee s monthly bill reflects a credit, and the employee simply pays the difference. The Cass solution then provides chargeback feeds to the employer s GL system for end to end financial management.

13 What are Best Practices? 80% of enterprises with formal BYOD programs say their processes are fragmented. Why? Partially because they ve been pieced together in a more reactive rather than proactive fashion, and partially because the market has been void of true BYOD solutions that extend beyond MDM. That void is slowing beginning to fill. So today, as organizations are evaluating their future with BYOD, they are starting to adopt enterprise level solutions that put tight processes and controls in place, such as those for managing policy and expenses. The needs created by BYOD go far beyond securing company data. BEST PRACTICE SOLUTIONS INCLUDE THESE FUNCTIONS: Automated Enrollment and Policy Acceptance Streamlined self enrollment process, with approval workflow and policy acceptance, supported by HRIS integration. EMM Integration Real time device management capabilities with integration to financial, inventory and policy control systems. Inventory A BYOD inventory allows the employer to keep accurate tabs on BYOD participants and details such as device(s) and operating system. Reimbursement Directly to Carriers Electronic payments are made directly to employees wireless providers and credited to each employee s account. Accounting Integration Expense data with accurate cost allocations is fed into accounting software. Visibility & Reporting Complete business intelligence provides high level and detailed information on BYOD enrollment and expenses.

14 What Does Best Practice BYOD Look Like? BYOD is more than just mobile device management. Best practice BYOD deployments are thoughtfully designed, highly automated and systemically integrated to create an efficient touch less process. See the Cass model below. The Cass BYOD Model

15 Managed BYOD A Complete Service Cass Information Systems delivers a complete platform and managed service that enables efficient and cost effective BYOD. See how Michelin implemented a best in class BYOD solution, making a cost neutral transition to BYOD for 4,000 employees. Learn more about our BYOD platform, and how to eliminate expense reports & payroll stipends