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Angry Birds, Kool-Aid And The Consumerization Of IT

Back in 2011, Apple coined the phrase the “consumerization of IT”.  Today it is just known as BYOD “Bring Your Own (mobile) Device”. Back then, Enterprises would issue their employees devices like flip phones or Blackberrys.  In 2011, Apple was already on its 2nd gen phone. The roots of the BYOD movement can actually be traced back to the creation of the App Store.  This new concept allowed users to download (productivity) apps like Angry Birds.  As the most downloaded iPhone app ever, one could argue that it was addictive games like Angry Birds that really started this revolution. (Come on. You know you played it…) Like a thunder-clap, every research company and news organization started drinking the proverbial Kool-Aid. Before BYOD was really even a “thing”, article after article touted how much money companies were going to save by letting the employees deal with their own mobile phones.

But At What Cost?

Aberdeen conducted a study regarding how cost-effective it was for companies to shift to BYOD.   They found that companies with 1,000 BYOD phones spent an average of $170K/year more than organizations that maintained a well controlled corporate environment.  The costs where actually shifted to other parts of the organization.  The central cost of processing  1-2 invoices shifted to processing 1,000 expense reports.  In addition, the IT support costs of managing and securing company data on BYOD devices actually increased.   The cost of the equipment decreases comes at the expense of higher service and administrative costs.

Follow The Money To The Bank

How did this happen? It is often said that if you want to find out whodunit, you should “Follow The Money”. If you find out who benefited the most financially, you will likely find your answer.  For Apple and others, it’s all about turnover and how fast they can get people to upgrade their old phone to the newest models. It is simple math.  Individuals upgrade their mobile phones on an average of 18-20 months. Companies take an average of 28-32 months before they will allow employees to upgrade their phones.  Improving turnover by 10-12 months means Billions in additional revenues for Apple and other phone manufacturers. Is it any wonder that Apple and device manufacturers are BYOD’s biggest cheerleaders?

The Tipping Point

According to Gartner, by 2017, over 50% of companies will require that employees use their own devices.  BYOD is here to stay.

Best Of Both Worlds

It is possible to get the best of both worlds. One of the latest strategies is to issue corporate SIM cards to employees that are linked to the corporate account.  These SIM cards are sent to employees who simply put them into their own devices.  There are several advantages to this strategy.

• Employees get the latest and greatest device when they want at their own expense
• Companies retain the company phone numbers after an employee leaves.
• If an employee leaves the company, the employee just swaps out the SIM card to a personal number.
• Companies maintain phone records for compliance purposes.
• Companies save money by maintaining the larger corporate discounts and less expensive plans.
• Expense reports are no longer required.  All the charges come in on one bill.
• Lowest cost overall – No equipment charges, lowest plan and administrative costs.

Maximizing Cost Reductions And Achieving Balance

When enterprise companies bring Optelcon in to analyze their mobility spend, our clients’ average domestic monthly smartphone service spend is between $75-$100/month per device. Given this fact, it is easy to see why the idea of giving employees a $50-$75/month reimbursement makes sense. After (re)negotiating our clients’ mobile agreements and optimizing their rate plans, the cost of these same service plans drop to an average of less than $50/month; even less for tablets and Wi-Fi devices.  Without the cost of equipment, this hybrid strategy provides the lowest cost without the issues of letting employees own the services plans.

If your company’s average cost per mobile device is higher than $50/month, please contact us for a complimentary corporate mobility spend analysis. You have nothing to lose but wasteful and unnecessary costs.