BYOD – A Mirage or Real Solution to Cost Saving?

Some companies think that BYOD (Bring Your Own Device) is the answer to cost control of their mobility program. BYOD has been around for about 10 years with promises of a quick fix solution to recurrent problems in corporations; satisfy every employee on mobile device preferences and try to control the ever increasing cost of wireless invoices.

BYOD has its merit of being simple and clear to deploy. From a corporate point of view, it provides latitude to employees to welcome them into the organization with their own device and plan. In compensation, the company provides a stipend (on average $75) to those employees to cover the cost of their mobile device being used for work. In theory, this approach works but when you start looking into details, you realize soon enough that a group of employees is exposed to cover business related charges on their own (long distance, data overage, roaming charges, etc.) which can turn off this group of employees on the corporate BYOD program. Complaints and exceptions multiply over time which makes the BYOD program even more complex to manage internally. In some cases, repair cost for breakage of a mobile device used at work might be claimed which sometimes is expensive on newer device models on the market.

The Hard Facts

A corporately liable mobile program from the wireless service providers will provide benefits to the company:

• Preferred rate on plan with lots of inclusive to reduce incidence of variable costs
• Centralized billing with shared option to maximize investment
• Preferred cost on device acquisition
• Various credits on account
• % of fleet line cancellation at no cost
• % of fleet device upgrade at no cost
• Leverage on contract negotiation at renewal based on volume
• Limited number of individual authorized on the account

The fact that some corporations want to leave this approach to a more liberal perspective (BYOD) is mostly based on issues related to repeated and excessive variable charges on bills (roaming fees, local data overage). Our 20 years in Telecom experience has helped us identify two main reasons why corporations are turning around on their mobility program. Cost relation to abusive usage and meeting employees satisfaction on devices selection.

Cost relation to abusive usage is addressed through a more robust telecom policy stating what is allowed and not, coupled with monthly review and reporting on delinquent usage from telecom policy regulation. By communicating properly throughout the organization and monitored by management, the employees recognize and adhere to the corporate policy if consequences are tied to deviation from rules and regulations.

Meeting employees satisfaction on device selection is never a battle that can be won as the mobile industry is heavily marketed on creating desires and trends of identity to the newest mobile device on the market. Prices of new devices have been steadily increasing over the past decade to reach over $1000 for most performing and preferred brands on the market. Unless the corporation is willing to spend significant amounts of money on newest device models acquisition, it is very difficult to meet employees’ expectation on that aspect.

On the other hand, the BYOD approach provides the following benefits:

• Hands-off on device ownership and selection for employees
• Simpler management process through a stipend program
• More liberty for employees to select their service provider and preferred device
• Increase employees satisfaction
• Boost productivity
• Access to newer technology

These benefits are very enticing to corporations who are looking to address the issues stated above. They need to clearly set limits that suit potential exceptions such a overage costs related to business. This requires the corporation to investigate on individual liable bills which could be perceived as an infringement to private information as personal calls and charges are displayed on the bill. Keep in mind here that contract liability is set to the individual which doesn’t provide the corporation rights to access billing online.

As for device support and MDM management, it becomes a great challenge for the IT support group as they have to deal with a multitude of mobile device models to be supported with email, custom applications and more. Plus, the selected MDM solution might create intrusion on privacy issues as the device is privately owned by the employee. Theses aspects are not negligible as they put more pressure on the IT support group that is already dealing with constant emergencies.

Finally, the cost difference of an individual plan can be very high compared to a similar corporate plan with the same conditions and inclusive. In Canada and the USA, the recent modification to plan engagement for consumers (from 36 to 24months) had a significant impact on plan cost. Most consumers that are set on a subsidized program for their mobile device pay much more than the company – between $25 to $35.

Hybrid-BYOD could become the next trend

Plans cost at wireless service providers are built to include a subsidized segment of the acquired device on activation. That is one of the industry’s tricks to tie up the consumer to the carrier until they are released from the contractual engagement. This rule also applies to the corporate world. But what is really the subsidized cost portion? This cost varies between $7-$15/month from carriers (refer to table below), which means this cost is added to the plan cost to pay for the device’s subsidized portion. What if you could remove this cost from your corporate mobile program? What kind of financial impact would it have on your company?

This is where Hybrid-BYOD comes into play. Imagine a program where the company takes full benefits of the industry corporately paid program (including volume discounts, credits, etc.) and provides to its employees a unsubsidized plan, centrally paid and supported by the company. The employee is responsible to come in with their own device (preferred one or pre-authorized selection from IT) and is 100% responsible for it. Let’s look at the financial benefit of this idea.

Understanding that the average stipend on the market is set at around $75, the difference between a corporate liable mobile program VS a stipend cost for employees with a mobile device is around $25. If we simulate these values toward a company with 1000 devices, we’re talking of $300,000* of dollars that could be saved annually from a Hybrid-BYOD approach. Not bad! In summary, if BYOD is an avenue your company is exploring, do not under estimate the security risk and increase management requirements to support all employees and make sure to weight all the benefits VS cost. Consider the Hybrid-BYOD as a financially appealing alternative as it provides your company with significant lower cost plan programs along with other benefits reserved to the corporate world.

Written by Normand Cyr, Founding-Partner at Ginger Telecom
March 2019

* (1000 lines x 25 $ x 12 months)

Individual VS Corporately paid mobile subscription