Reducing Wireless Device Expenses

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Reducing Wireless Device Expenses

Mobile Expense Management Solutions

Executive Brief

Today’s fast-paced business relies more than ever on cell phones, data cards, and convergence devices to stay connected in a global marketplace. However, with growth comes significant challenge in managing the expenses associated with wireless devices. Runzheimer International provides services that enable organizations to improve their management of mobile devices including achieving better service, improved productivity, and cost savings in the range of 5% to 25%.

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The Proliferation of Mobile Devices

Today’s fast-paced business relies more than ever on wireless devices to stay connected in a global marketplace. However, with growth comes significant challenge in managing wireless expenses. A proliferation of new and improved mobile devices, changes in carrier coverage areas, carrier plans and features, demand for integration of mobile devices with CRM and proprietary applications, and the growing number of employees who carry a mobile device have created an expense area that most organizations have little time and limited core competencies to manage. In most cases, this means that while the cost per minute of wireless service continues to decline, the cost per wireless user is increasing.

The Growing Cost Impact

With average annual costs for mobile device wireless service running at nearly $1,400 per device (including voice and data) and assuming that at least 30% to 50% of an organization’s workforce use a mobile device, the total annual costs can be significant.

Many organizations lack the internal processes and policies that would enable them to reduce or at least contain their wireless mobility spending. According to Runzheimer International’s latest Total Employee Mobility® Benchmarking Report, 50% of organizations do not have any policy (no policy or policy in development) regarding mobile technology for virtual office workers (e.g., virtual office means work locations outside of traditional offices).

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A clearly defined and communicated virtual office or mobile device policy is key and is an essential element for managing costs. Such a policy should address eligibility criteria and spend thresholds for a series of items that impact wireless costs, such as defining:

• Eligibility for a mobile device

• The types of devices that should be approved

• Whether the devices are company-owned or employee-owned • What plans and features should be activated

• Whether personal use will be acceptable

• Whether the employee should be charged for personal use

• The procedures employees and IT should follow when a device is lost or stolen • Whether devices should be password-protected

The ROI on Mobile Devices

When mobile devices are deployed, managed, and used effectively, the return on investment on this wireless technology is high. According to a 2008 survey by Nucleus Research, the average Smart Phone user works 71 additional minutes per day or 15% more per week. For a sales person with a revenue target of $750,000 per year, even a 30-minute per day productivity improvement can lead to 88 additional hours of selling time per year, translating into substantial incremental revenue impact.

In fact, research conducted across a variety of industry experts reports a range of improvements as follows as a result of investments in mobile devices:

• 20% - 30% in client response times; • 10% - 20% in service profitability; • 10% - 20% in employee productivity; • 15% - 20% reductions in business miles

driven;

• 10% - 20% reductions in overtime costs; • 10% - 20% reductions in fuel expenses.

20-30%

10-20%

Client Response Time Service Prof itability Employee Productivity

15-20%

10-20%

# of Miles Driven Overtime Costs Fuel Expenses

Service and Productivity Improvements

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Rising Complexity of Mobile Device Management

Many organizations today are overwhelmed by the fast-paced nature of wireless mobility and the number of changes in carrier plans, features, and devices that they need to manage. When wireless expense management is a manual process, this challenge is further compounded by the dizzying complexity and length of wireless bills and the lack of internal resources and skills to consistently track, assess and take corrective action on wireless spending on a monthly basis. Organizations, particularly those with multiple field office locations, are frequently inundated with separate bills for every location and bills often lack the detail needed to properly evaluate them. Many companies also struggle with trying to allocate and analyze wireless expenses to the appropriate work groups and cost centers.

The following list highlights the dynamics and complexity that make managing wireless carrier invoices significantly more costly than wireline expenses:

• Billing formats can be significantly different by carrier.

• Organizations must deal with a wide range of items on each invoice (e.g., billing account numbers, plan names and rates, feature names and rates, discounts, equipment fees, accessories, taxes, etc.).

• Rate plans are ever-changing and confusing and many companies do not monitor minutes to optimize pooling and keep costs low.

• There are fixed charges, items that are billed based on usage and the time of day the service is used, plan thresholds, etc.

• Staying on top of MACD (moves, adds, changes, deletes) activity is challenging and contracts only contain part of the information needed to validate billing.

• There are Master Service Agreements, Service Level Agreements, amendments to contracts, Customer Service Records, and other items that must be validated to ensure the pricing is accurate.

• Organizations must track contract start and end dates for each mobile device that is in service, as well as warranty and insurance information pertaining to each device.

When bills are received in paper format, it is nearly impossible to perform automated audits to ensure that employees are following policy and that bills are accurate.

Steps to Lower Wireless Costs and Improve Control

Below are a series of recommendations that should position your organization to begin to take control of your mobile device and wireless expense management.

Step 1: Establish Your Baseline

The saying, “you can’t manage what you don’t measure,” is absolutely true with regard to mobile devices. So, the first step is to collect several data points that will create your

organization’s baseline for mobile device and wireless expense management.

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Step 2: Benchmark Costs

Once your organization has established its wireless expense baseline, the next step is to compare and contrast your data points against industry averages and peers to estimate savings opportunities. Step 3: Establish a Mobile Device Policy

A mobile device policy is a written document that provides a comprehensive set of guiding policies to ensure consistency, security, compliance, and an optimized return on investment on wireless technology (i.e., cell phones, wireless data cards, and “smart” devices such as PDAs,

Smart Phones, and Blackberry devices).

Step 4: Establish Security Guidelines Around Mobile Device Use The mobile device policy should include risk management and security considerations.

Step 5: Optimize Wireless Carrier Selection

Many organizations make the mistake of selecting wireless carriers according to employee or manager requests based on what they believe represents the best wireless coverage for the location in question. The problem with this approach is two-fold – first, end users are not necessarily in the best position to know which carriers provide the best geographic coverage and how that coverage may vary depending on voice or data usage, and; second, even when end users are acting based on the correct information, this approach results in a multitude of disparate and often poorly managed carrier relationships. Step 6: Continuously Control, Monitor and Optimize Wireless Carriers, Plans, and Employee Behavior Organizations should continuously monitor wireless carrier bills to not only check for invoicing errors but even more importantly to monitor each employee’s rate plans to ensure that mobile workers are placed

on plans that will optimize pooling and keep expenses as low as possible. This includes assessing employee voice and data usage, as well as monitoring zero use, low use, feature non-use, features that are needed but missing and a host of other data points. In addition, roaming and international roaming charges as well as Directory Assistance calls should be closely monitored and action items should be taken to correct end user behavior where use of these functions is creating exceptions to the organization’s mobile device policy. Furthermore, as part of the monthly optimization process, individuals who are exceptionally high volume users of mobile devices (also known as “pool busters”) should be identified, along with action items to place these employees on individual plans outside of the pool to fully optimize their programs. Unfortunately, the bad news as it relates to continuous plan optimization is that it is virtually impossible to perform through a manual process that relies on hard-copy bills provided by the carriers.

Runzheimer International provides plan optimization services that enable organizations to minimize mobile device expenditures and ensure that invoices are accurate.

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Step 7: Adopt Efficient Processes to Reduce Cycle Times, Improve Service, and Cut Costs In order to achieve cost savings, improved productivity and better service with wireless carriers, organizations have the opportunity to leverage automation and expertise through Runzheimer’s mobile device expense management services, enabling organizations to:

• Maximize purchasing power and available discounts through carrier consolidation, without sacrificing quality of service.

• Achieve cost savings, process efficiencies, and minimize invoicing errors through ongoing optimization and standardization of carrier device and plan selections.

• Improve turnaround times and overall service levels through wireless carrier ordering and change process standardization.

• Significantly reduce staff time (50% - 90% reductions in time) spent on wireless carrier invoice reconciliation, auditing, cost allocation and reporting through proven enterprise-level automation tools.

• Improve internal controls and policy compliance through reporting.

Runzheimer International Mobile Device Expense Management Services

Runzheimer International provides mobile device assessment services as well as a full range of mobile device expense management services that enable organizations to maximize the return on investment. For more details, contact Runzheimer International at 1-800-558-1702 or [email protected]

About Runzheimer International

Founded in 1933, Runzheimer International serves 60 percent of the Fortune 500 and numerous government agencies.

Recognized for providing innovative solutions relating to Total Employee Mobility®_{, Runzheimer is the global leader in}

workforce mobility programs including business vehicle, business travel, corporate aircraft, employee relocation and compensation, and virtual office.

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