Managing Your Mobile Devices Are You Getting Your Money s Worth?

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1 Managing Your Mobile Devices Are You Getting Your Money s Worth? WHITE PAPER: Cost Savings Analysis RELEASE DATE: December Mobile Solutions Services, Inc. All Rights Reserved SAVE Mobilessinc.com 6766 SOUTH REVERE PARKWAY, SUITE 100C CENTENNIAL, CO MOBILESSINC.COM SAVE

2 WHITE PAPER: Managing Your Mobile Devices Are You Getting Your Money s Worth? EXECUTIVE SUMMARY Many of today s enterprises find themselves fighting their own Battle of the Bulge. That is, the mobile device bill bulge. Whether they support a bring your own device (BYOD) policy, provide company-liable devices, or use some type of hybrid approach, no one is immune to the creeping costs of managing mobile devices and their related expenses. And, the costs are only expected to rise. In fact, according to analyst firm Gartner, enterprise spending on mobile telecommunications is expected to increase by 16% from 2013 to In addition, mobile devices are fast becoming the norm for both personal and business use around the world in 2015, the worldwide mobile worker population is expected to increase to more than 1.3 billion. 2 With this increase in mobile device spending and usage comes the potential for increases in billing errors as well. Industry analysts estimate that up to 35% of telecom invoices contain errors, which can add up to significant costs for today s businesses. In a tight economy where every dollar must be accounted for, enterprises must have greater visibility into these costly telecom errors. Many companies are beginning to consider outsourcing the management of their mobile devices in an attempt to rein in the direct and indirect costs associated with enterprise mobility. After all, businesses could save anywhere from 10 to 35 percent of their wireless costs if they managed their wireless services more closely. 3 But, is using an external managed services firm the most cost-effective solution? How much can truly be saved by utilizing an outside consultant to manage the myriad processes and services related to enterprise mobility, such as mobile device procurement, carrier negotiations, mobile expenses, application deployment, and so on? 1 Gartner. Focus on Four Areas to Control U.S. Cellular Voice and Data Service Costs, January 27, IDC. Worldwide Mobile Worker Population Forecast, January 5, Gartner. Key Enterprise Wireless Service Policy Guidelines to Maintain Cost and Security Control," January

3 To get to the bottom of these questions, Mobile Solutions analyzed the costs associated with managing a fleet of mobile devices in-house, compared to the cost of turning over an enterprise s mobile device management to external experts. Using benchmark research from esteemed industry analyst firms such as Gartner and Aberdeen as well as usage and cost data from current clients, Mobile Solutions assessed the value that an outsourced solution can deliver for today s enterprises. Companies who are weighing their options and considering whether an external mobile device management provider makes sense for them will find the results of the Mobile Solutions analysis enlightening. 2

4 INTERNAL COSTS OF MOBILE DEVICE MANAGEMENT The management of a fleet of mobile devices whether that fleet is defined by 50 or 50,000 devices comprises a whole host of associated expenses, including: 1. The cost of the device itself, which can range from free to more than $ The carrier cost of the monthly voice and data plan for the device, which can vary dramatically depending on the negotiated contracts with individual carriers. 3. The cost of maintenance and replacement of the device, including spare parts, repairs and replacement of lost or stolen devices. These costs are directly related to the physical devices, however, and do not include the internal costs incurred by a company for the manpower required to manage the fleet. In addition to the traditional activities associated with managing mobile devices invoice processing, inventory control, billing errors, contract negotiations, etc. today s mobile device management processes also include concerns about data security, distribution of mobile business applications, reining in international roaming, complex device fixes, and mobile policy compliance. The mobile device world has become much more complicated and promises to only become more so in the future. With these added complexities comes the need for more skilled staff to manage enterprise mobility. According to a study by Aberdeen, an average of 2.4 full-time equivalents (FTEs) is required for every 1,000 devices a company manages in-house, whether a BYOD policy is in place or not. 4 The cost of an FTE managing device administration averages approximately $75,000 per year, so a company with 1,500 devices will spend around $225,000 to manage those devices in-house (Figure 1). Figure 1. Average Current Cost Structure for Internal Costs of Mobile Device Management. For a real-world example of this cost structure, Mobile Solutions experts analyzed the costs incurred by a small utility company whose devices are now under management by Mobile Solutions. Prior to signing on as a Mobile Solutions client, the company employed five FTEs to manage approximately 4,000 devices (Figure 2). While a few companies may be considered outliers and fall on the high or low end of these estimates, the majority of enterprises fall in line with these averages for the number of FTEs required for the number of devices managed. 4 The Aberdeen Group. Controlling Wireless Expenses Has Logic Gone Out the Window? September

5 Figure 2. Industry Averages for Mobile Device Management What Mobile Solutions discovered is that companies typically fall into one of two categories when it comes to where their mobile device management spending is going: 1. Higher internal costs and lower carrier costs. In this case, more employees are needed inhouse to learn the carrier plans and manage the company s devices. The external costs associated with managing and employing an outside vendor, however, are minimal. Of course, the company still incurs external costs from the carriers themselves. 2. Higher carrier costs and lower internal costs. On the flip side, if the internal staff required to oversee device management is minimized, then the carrier expenses can be higher. Mobile Solutions estimates that only about 10% of an employee s time is required to manage 1,000 devices when a company uses a mobile device management platform like the one provided through Mobile Solutions. In the past, it was significantly challenging for companies to achieve both internal and external cost minimization. To keep external costs down, an organization had to hire more people to manage their mobility services. To keep internal costs down, a company had to absorb higher than necessary mobile bills. What many businesses fail to understand is that, in addition to direct costs, utilizing in-house staff to manage mobile devices means they are wasting valuable IT skills and expertise on processes that are not focused on driving the business s growth. The time and resources spent by in-house IT experts on troubleshooting devices could be better spent in more mission-critical areas. During these lean economic times, finding methods to control mobile device expenses is more important than ever. In fact, businesses that have a telecom expense management program in 4

6 place have been shown to save 22% more than companies who do not. 5 These savings can have a significant impact on a company s bottom line. So, how can companies determine if an outsourced solution is the right answer? First, companies need to better understand what an external firm can offer. BENEFITS OF EXTERNAL MOBILITY MANAGEMENT Today s mobile device management environment bears many similarities to the payroll processes of long ago. It used to be that companies managed their payroll by employing clerks and accountants who had a deep understanding of the field and who were responsible for keeping up with the many Federal and State changes and updates. This approach was in place to ensure that the company remained in compliance with payroll laws and regulations. These expert staff members were a costly but seemingly necessary drag on a company s budget. It wasn t until the introduction of specialized software from vendors with expertise in the payroll industry that companies began to realize significant savings and reduced risk compared to their previous payroll processes. This same evolution is occurring in the mobile device management industry. Many companies today are trying to manage their device costs in a highly manual way, which can create both high internal and high external costs. To minimize overall mobility costs, companies must turn to automation and expertise. That is where a managed services provider with a deep understanding of the mobile device industry can help. Expertise The world of mobile devices is seemingly changing at the speed of light. From upgraded operating systems to new iphones and Androids, IT staff are challenged to maintain up-to-date knowledge of the mobile device market to ensure the procurement of the best devices for the company s needs. This can lead to real problems when employees are looking for help with troubleshooting the inevitable problems that arise. In addition to the devices themselves, carrier plans, promotions and methods change frequently and are often complex. There is no place to get industry updates except through direct interaction with the carrier. Understanding how rates are determined and negotiating better rates for the business requires skills that many IT staff are not equipped with. As a recent Gartner report stated, U.S. companies with 500 or more employees that are not adequately managing their mobile telecom expenses could be paying upward of 30% more than necessary for cellular voice and data services. 6 Without a firm grasp of their mobility environment, companies could be making the wrong mobile device choices. Trying to stay on top of the complicated mobile world adds to the already stressed and overloaded IT department. With at least one-third of funded technology projects currently waiting in an IT backlog, increasing the IT workload could spell trouble for a company trying to maintain their competitive market positioning. 7 5 The Authority on Telecom Management Practices (AOTMP). The Value of TEM. 6 Gartner. Focus on Four Areas to Control U.S. Cellular Voice and Data Service Costs, January 27, CIO Magazine. How to Prevent IT Department Overload, May 21, ( 5

7 An outsourced solution for mobile device management provides unparalleled expertise as well as consultants who are well-versed in carrier negotiations and who understand the everchanging mobile world. Automation Much as it changed standard payroll processes, the automation of mobile management can affect the amount of time and resources that companies spend on their mobile devices. Tremendous operating efficiencies can be gained through an automated system that allows for: Daily real-time information for each device with each carrier. A detailed history of multiple months of invoices for each device. Alerts and technology solutions that proactively manage costs and usage. Changes in devices and usage to be made simply and efficiently. The time savings enabled through an automated mobile services solution can give back valuable time to IT and accounting staff, freeing them up to work on more strategic areas of the business. COST COMPARISON OF INTERNAL AND EXTERNAL MOBILE MANAGEMENT The research conducted by Mobile Solutions shows that there are clear cost savings to be found in outsourcing enterprise mobility management. Take the Mobile Solutions services, which are provided at a flat rate per device managed. A company with 1,500 devices would spend $225,000 each year to manage those devices using three in-house FTEs. By comparison, the Mobile Solutions services and team plus a small percentage of in-house FTE time would cost only about $112,500. Figure 3. Internal Company Costs Compared to Mobile Solutions Costs The resulting savings is $112,500 each year. As the number of enterprise devices grows, so does the potential to save. By deploying an automated approach to mobile device management, Mobile Solutions has the capacity to manage more than 20,000 devices highly effectively. 6

8 Figure 4. Annual Internal Cost Savings Using Mobile Solutions Companies who are considering employing an external vendor to manage their enterprise mobility needs can compare their current employee structure to these cost models to calculate the potential for internal cost savings. With this information in hand, a more deliberate, datadriven decision can be made. HOW MOBILE SOLUTIONS CAN HELP No matter what a company s managed mobility processes look like today, enterprises must prepare for the fast-changing needs of the mobile worker. Whether a company supports a BYOD program, supplies company-owned devices, or takes a hybrid approach, Mobile Solutions simplifies enterprise mobility management. Mobile Solutions helps businesses gain control over their increasing mobile device expenditures and generates cost and time savings through a comprehensive, automated approach to mobile device management. The turnkey solutions provided to Mobile Solutions clients include: Mobile expense management (MEM), which automates invoice management to reduce cost and risk. Mobile life cycle management (MLM), which manages and tracks wireless assets while ensuring compliance with corporate policies. Procurement and order management (POM), which handles mobile device, equipment and accessories order processing. Mobile device management (MDM), which can remotely distribute mobile applications, data and configuration settings to ensure the security of devices. Real-time expense management (RTEM), which enables active monitoring of mobile device usage to avoid overage charges. With minimal investments of money and time, the Mobile Solutions cloud-based platform gives companies big and small the actionable mobile device and expense information they need to maintain control over enterprise mobility. CONCLUSION 7

9 As the growth of mobile devices quickly outpaces PC growth, CIOs must prepare for additional IT challenges and requirements. CIOs are looking to implement cost-cutting initiatives that can generate surplus funds to funnel into more strategic areas of the business. Just as accounting departments of the past took advantage of automated payroll solutions to find cost savings, innovative business leaders should consider outsourcing enterprise mobility management to optimize carrier costs as a way to cut internal costs while maximizing business performance. ABOUT MOBILE SOLUTIONS Founded in 2008, Mobile Solutions is the leader in mobile expense management. Dedicated to providing customers with best-in-industry services and solutions, Mobile Solutions serves thousands of clients across a multitude of industries including construction, general contracting, transportation, real estate and software. Focusing on cost reduction, invoice management and mobile device management, Mobile Solutions offers a state-of-the-art, streamlined, cloud-based solution to easily manage telecom contracts, invoices and usage reports. Mobile Solutions is located in Denver. To learn more, visit 8