Cost Justifying Mobility Management Untapped Cost Savings You Can t Ignore

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1 Wireless expenses are the fastest growing and least managed telecom expenses. Most organizations are managing mobility with a patchwork of manual processes - for hundreds of devices, contracts, and invoices - that is costly and time-consuming. Effective mobility management provides significant cost reduction from optimization of rate plans to actual consumption. In this white paper, we ll explain the cost savings opportunities available when managing mobile expenses versus fixed, talk about the pros and cons of Employee Liable versus Corporate Liable policies, and help you build the business case for mobility management. May 2009 Copyright 2009 Telesoft

2 Table of Contents Introduction... 3 Why Managing Expenses is Different from Managed Fixed Expenses... 3 Enterprise Challenges and Solutions... 3 Employee Liable Versus Corporate Liable... 5 Evaluating Mobility Management Solutions... 6 Determining What You Are Buying... 6 Buyers Checklist... 7 The Business Case for Mobility Management... 8 Cost Justifying Invoice Processing from Savings Results... 8 Conclusion... 9 About Telesoft

3 Introduction Widespread adoption of cell phones in the consumer market has been matched in the business world by expectations that workers will be able to answer business calls and conduct business anywhere 24 hours a day, 7 days a week. Employees are expected to have mobile numbers printed on their business cards, respond quickly to text messages, e- mails, and have wireless access to the corporate network for real-time updates to vital information. This comes at a price with wireless costs growing at a rate of 30% or more for many enterprises. Lax governance compounds the problem of runaway wireless expenses. Why Managing Expenses is Different from Managed Fixed Expenses Enterprise Challenges and Solutions Challenge: Solution: A strong consumer market provides easy access to devices and wireless service plans at a low initial cost.» Consumer advertising creates demand for new features and devices in the enterprise which add to the runaway spending on wireless hardware, applications, and inventory management.» Employees are used to having control in selecting devices, service plans, and service providers for personal use.» Service plans that allow unlimited calling during business hours within the network create loyalties for consumers that wish to call friends and family at little to no cost.» Managers are often willing to ignore corporate policy to help equip new employees with the latest technology. Establish a strong corporate policy for mobility with automated enforcement.» Secure executive support and establish clear ownership of the budget for wireless expenses.» Establish a formal policy that defines eligibility for service plans and devices based on employee job roles. Also set expectations consumption and how devices will be used.» Use a procurement portal to automate policy enforcement for acquisition, upgrades, and deactivation of devices and service plans. 3

4 Challenge: Solution: Challenge: Solution: carriers revenue models require a different approach to manage wireless bills» Most wireless customers are in bucketed plans of fixed monthly allotments with minutes that are forfeited by some users and other users facing penalties for excess consumption.» Enterprises can cut these costs by pooling users together and purchasing large blocks of anytime minutes for employees, but these pools need to be carefully managed.» Enterprises that pay for a large pool of minutes that are not used, are paying a much higher cost per minute compared to organizations that consume nearly all of their minutes. Manage employees plans to save money» Leverage software that monitors wireless plans and employee consumption patterns to optimize costs and flag opportunities to move employees on the right plans each month.» Negotiate better rates by rolling up all wireless spending from multiple accounts with each carrier and compare your rates. Enterprises must automate labor intensive functions of invoice processing, expense validation, employee accountability for services consumed, and Internal Revenue Service tax compliance.» Manual processing and validation of invoices is inefficient it can lead to uncontrolled service disconnects and late payment penalties for failure to pay bills on time. Billing errors may not be found.» Pooled plans make it difficult to hold individuals accountable.» Enterprise payments or reimbursements of employee s expenses for wireless devices or service plans, represent taxable income. Failure to track business and personal use may result in federal employment tax assessments for employers and federal income tax assessments for employees in the US and lost VAT tax credits in Europe. Automate invoice management, validation, and reporting» Invoice management solutions can automate invoice processing and validation.» Automated reconciliation of billing with inventory can enable enterprises to identify unused phones and service plans of employees that are no longer working for the enterprise.» Personal and business calls can be tracked for chargeback and tax compliance requirements.» Charge-backs can allocate expenses based on actual usage by user to promote visibility and awareness of expenses. 4

5 Employee Liable Versus Corporate Liable Managers often debate the merits of corporate liable and employee liable approaches to managing devices. With an employee liable approach, the device and service plan contracts are signed by the employee. Under a corporate liable approach device and service plan contracts are signed by the enterprise. Some organizations reimburse a fixed portion of the wireless service costs through expense reimbursement while others provide employees with a stipend. These approaches may avoid the costs associated with actively managing a program, but there are other considerations. With employee liable plans, the enterprise does not have clear title to wireless devices and it cannot compel employees that are leaving their jobs to return their devices and the data on the devices. In addition, the enterprise is not able to control the telephone number associated with a particular job. Fixed stipends can drive undesired behavior. If employees are close to using their allotment of minutes for the billing period, they may avoid answering calls. Employee Liable Versus Corporate Liable Comparison Features Compliance Provisioning Inventory & Cost Customer Support Plans & Contracts Fraud & Risk Management Security Employee Liable: device and service plan contracts are signed by the employee No visibility or archiving of user activity for tax compliance Users order devices and services Inventory and costs hidden in expense reports, limited scrutiny Employees are on their own; services are disconnected if bill past due Corporate umbrella plans may be available for each user, but there is no pooling, users face overages Potential for fraud; Risk for inappropriate use of cameras, dialing/texting while driving etc. No controls or clear title for devices and data on employees Corporate Liable: device and service plan contracts are signed by the enterprise Full visibility. policy compliance, and data archiving Automation to capture inventory activity Complete inventory of devices, phone numbers, spending, usage, trends, user analysis, call detail Leverage with carrier account teams and SLAs Volume contracts, waive equipment/replacement charges, trending to optimize usage to plans Opportunities to manage sensitive data on devices; True number portability for job role Avoidance of fines for breach of confidential employee, customer, patient, and corporate data 5

6 Evaluating Mobility Management Solutions Before beginning an evaluation of mobility management solutions, enterprises should examine their current capabilities and challenges. It is critical to secure executive support for the program and establish clear ownership of the budget for wireless expenses. Determining What You Are Buying As the differences between fixed and mobile services start to come together, there are benefits and efficiencies from having one integrated system to manage both mobile expense management and traditional telecom expense management. Enterprises will be able to leverage volume discounts for better pricing, establish more favorable resolution of billing claims and service levels with the benefits of using one system. Organizations are just starting to deal with one account team from carriers that provide both fixed and mobile services, but more integration is coming. Enterprises must be careful to avoid compromising on a system that does not address all of the unique aspects of wireless services. A portal for mobile services must be able to accommodate the general population of employees who will use the system less often and be less familiar compared to specialists that use a portal for fixed wireline services. These general employees will have less tolerance for complicated ordering procedures and interfaces that are not clear. In addition, workflow routing for employee requests may be more complex for mobile services. The system must be able to manage unique service plans for wireless services and sophisticated optimization schemes that require continual review to achieve the lowest cost per minute. Users may need to have their devices and contracts tracked to manage provisions for periodic opportunities to get new devices and replacement devices at no costs. Wireless also requires pooled plan reporting and variance reports to highlight devices with no usage and billing associated with employees that no longer work for the organization. 6

7 Buyers Checklist Below is a sample listing that enterprise buyers can use in their evaluation. The evaluation team should establish weighting and tailor their checklist for their specific requirements. Capabilities Invoice processing Portal Optimization Continual Audit Dispute management Invoice approval routing Interfaces Allocation expense charge-backs Document Management Contract Tracking Reporting System Administration Security Support Implementation Validation How will the system capture wireless billing for electronic (EDI, CD ROM, , HTML, FTP and Web downloads) and roll it up? Does the portal provide an intuitive system with policy enforcement and approval management? Can the system manage pooled service plans and provide a three month view of usage to identify the best plans for users? Does the system validate billing with contracts and special arrangements for replacement of devices? Can it flag ringtone charges or fees for unapproved application downloads and games? Will it reconcile billing with inventory and HR files? Does the system create dispute letters, vendor notification, and tracking with online reports? Can the system electronically route invoices for multi-tiered approvals? How does it interface with HR systems and accounting systems for cost center updates and General Ledger feeds? How does the system perform complex allocations for pooled service plans? How does it scan invoices and contracts? Can these scanned items be linked to invoices? Does the system track and alert users for contract expirations? Can it track users eligibility for no cost new devices? Are reports user friendly for the general employee population? What reports are standard and how are custom queries created? Does the system allow users to schedule vendor feeds, allow users to schedule reports, establish web settings for connection and idle time? Can controls be set to determine which cost centers managers can access and limit viewing to prevent display of personal information? What support is provided for implementation and steady state? What time is needed to implement the program and when is functionality available? 7

8 The Business Case for Mobility Management The expense management functions of invoice management, validation and resolution of billing errors, and reporting are similar to wireline functions. However, with wireless services, there are opportunities to reduce expenses through optimization of the service plans to the actual consumption. In addition the operational savings from automation and compliance to corporate policy should also be included in the business case for wireless management. Cost Justifying Invoice Processing from Savings Results The average enterprise can expect to save between 5%-35% of its total telecommunications expenses from a wireless expense management program. Feature Benefits Savings Procurement portal Improve compliance to corporate policy 5%-14% savings Optimization Expense validation Receipt, processing, expense allocation, web reporting Expense allocation chargeback Dedicated help desk support Pooling users to align consumption with purchased minutes Reconciliation of contracts to billing, MACD activity, & HR files Automation & reallocation of labor; savings from charge-back behavior modification Improved visibility of telecom expenses, reduction of employee abuse, fraud and misuse Reallocation of labor costs, reduced security risk from remote lockdowns, device hot spare break/fix, user inquiry answers 5%-25% savings 5%-8% savings Staff cost BPO cost 1%-3% Staff cost BPO cost for Help Desk 8

9 Conclusion Equipping a workforce with mobile technology may help to improve worker productivity, but it comes at a steep price. Wireless expenses have grown so quickly that many organizations simply do not have the necessary resources and expertise to address the challenges of managing a program. Most enterprise mobile environments are characterized by little to no standardization of wireless devices and service plans. Lax governance compounds the problem. Blurring between personal and corporate control of wireless expenses have led to an escalation of wireless expenses that is unsustainable. The blurring of personal and corporate control also leads to security risks. This environment makes for inefficiencies and added costs. These challenges can be met through a structured approach establishing corporate liable programs that use automation to gain control of wireless expenses. Creating policies and leveraging technology backed by people with deep expertise in managing procurement, optimization, invoice processing, rate plan optimization, expense validation, reporting, and helpdesk for troubleshooting wireless device issues will produce savings. A wireless management program is critical part of a comprehensive program of a Total Cost Management that will proactively manage expenses. About Telesoft Trusted experts in Telecom Expense Management (TEM) software and services for over 25 years, Telesoft reduces fixed and mobile telecom spend to improve your bottom-line. Telesoft automates the telecom expense management lifecycle from management of telecom invoices, usage, and cost allocation, through provisioning and inventory to lower telecom expenses and improve efficiencies. Our solutions are used by hundreds of commercial and government organizations including the largest and most complex telecom environments in the world. Offered as a hosted, software licensed, or outsourced solution, you get total visibility into your telecom expenses to reduce cost. Telesoft Corp E. Camelback Road Suite 300 Phoenix, AZ P: F: info@telesoft.com 9