The hidden cost of owning a mobile device
Gartner defines the total cost of ownership (TCO) as a comprehensive assessment of information technology (IT) or other costs across enterprise boundaries over time. For IT, TCO includes hardware and software acquisition, management and support, communications, end-user expenses and the opportunity cost of downtime, training and other productivity losses. This definition suits a pure IT product but in truth when managing your mobile phone network and services, there is some debate over who controls the asset and the costs – is it finance or is it IT? Does your business truly understand the amount of overhead that is required to manage their telecommunications service?
According to Angela Lovegrove, General Manager, Bluewater Control, “For every dollar spent on mobile communications carriage, there is at least another dollar of other cost, mainly in internal admin and management”. The process of buying, managing and accounting for a mobile device across an organisation is called Mobility Management. There are 5 stages involved in managing a mobile device, whether it is a smart phone, laptop, satellite phone or IoT/SIM only piece.
- Contract and procure, choosing the right plan and deploying the device
- Adding the mobile applications and security settings, onboarding and configuring apps, email, MDM
- Recording the asset and then managing lost devices, keeping the asset register up to date, and running a helpdesk to support users
- Allocating costs, depreciation schedules, dispute management and billing issues
- Departments review of their charges and the admin overhead in solving issues. Mobile fleet optimisation allows you to easily and continuously review the contracts and plans to always be on the best possible plan structure. This is possible thanks to being able to analyse cost through the Control and Govern modules in Bluewater™.
Potential Human Resource savings
Most organisations have multiple departments with multiple people that assist in managing the mobile fleet. According to research consultants VDC, they estimate that hard costs may only account for 10% or less of TCO over five years. That means soft costs like IT support and productivity loss can account for 90% of your TCO. For every 250 mobile devices, there could be a cost of 1 full time equivalent employee managing just the mobile fleet.
This is spread across the following job functions:
- Business Managers
- Help desk
*Conservatively $1400 per user
Hidden costs are derived from time spent manually doing the following jobs:
- updating the General Ledger each month
- evaluating and ordering mobile hardware
- trouble shooting faults
- writing emails articulating services required, approvals and signoff
- generating a variety of reports, cost centre, usage, exception reports
- transferring numbers in and out of corporate account.
- investigating issues, fraud, excess usage etc
So how do you save money on your bills and overheads and what sort of savings can be made? The business case for implementing a Mobility Management System, such as Bluewater™ can typically show the following benefits:
- Saving by removing redundant services- 3-5%
- Saving by optimising users 4-6%
- Savings from controlling user behaviour/ abuse- 5-10%
- Savings from right sizing plans 5-8%
- Savings from charging back personal usage 20-30%
- Tracking and redeployment of mobile assets
- Negotiating competitive plans and rates
- Ability to make decisions through greater visibility and control
- Cost certainty
- Consolidation of business processes
- Consolidation of vendors and internal systems
Has your CFO or CIO considered that a conservative estimate of $1400 of labour and other hidden costs are added to each new mobile device?