Managing Mobile And Wireless Spend


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Managing Mobile And Wireless Spend

  1. 1. Manage your Mobile and Wireless Spend A “How To” Guide for the Enterprise Total Control From Procurement to PaymentTM ®
  2. 2. Managing your Mobile and Wireless Spend: A “How To” Guide for the Enterprise While the use of mobile and wireless devices has quickly evolved into the third leg of an enterprises communications environment—alongside voice and data networks—most enterprises do not optimize or effectively manage their mobile and wireless communications. The decentralization of mobile device purchases, combined with the extensive use of mobile and wireless devices in today’s workforce makes taking control over this problem more of a challenge. Not only do enterprises need to establish corporate policy and determine the appropriate course of action, but they also need to consolidate information on existing users, usage patterns, plans, and devices. For years, many companies have chosen to simply ignore the problem. However, as the use and costs of mobile and wireless devices increase and enterprises become more reliant on their mobile data infrastructures, now is the time to start taking charge. It should come as no surprise that this problem has developed: The personal nature of the technology and low price points lend themselves to the individual-purchase model; the low purchase price of the devices themselves and associated plans don’t meet most company’s accounting guidelines as an asset that they want or need to manage. As a result, carriers continue marketing their products and services to their enterprise market as they would to teenage consumers. This becomes evident simply by looking at the devices and functionality offered – pictures, music, games, text messages, and so on. Consumers inherently look for different qualities than the enterprise. Consumers tend to want: • The latest and greatest gadget • A plan that reduces costs at home • A device that entertains more and takes up less room • A plan that meets personal communications patterns These are clearly different objectives and considerations than those of the organization. The good news is that there are some basic practices that go a long way towards controlling the situation. While this market-to-consumer model works well for the carriers—many are reporting record profits—it is not effective in fulfilling the organization’s business needs, improving the quality of service, or minimizing expenses. Gaining Control: Why is it important? Why now? The usage and expenses of mobile and wireless devices are huge and still growing. At present, more than 20% of the workforce use cell phones. In some industries, the penetration is much greater. In addition, developments such as fixed-mobile convergence are on the horizon, meaning that there will soon be devices that allow movement from wireless LAN on premise to the wireless network outside the organization’s campus, which will solidify the use of mobile devices as a significant, if not overwhelming, portion of an organization’s overall communications. Furthermore, the capabilities of new devices and data applications are driving information technology through mobile application deployment. Once these functions become more widespread, the dependence on mobile and wireless devices will increase exponentially—and for good reason: The productivity and opportunity gains will be tremendous. Mobile devices have already penetrated the day-to-day operations of workers in many industries, revolutionizing the way in which employees stay connected to one another, to their clients, and to enterprise data and applications. 37% of companies practice leverage wide-area wireless data networks for field service communications, and another 44% plan to do so within 18 months. - Aberdeen Group © 2006 Avotus Corporation
  3. 3. The bottom line is that mobile devices are quickly becoming a default com- munications mode for management and customer-facing activities. It is no longer a peripheral piece of technology that makes things easier, but rather a critical aspect of an organizations business model and competitive edge. The Invisible Spend The overwhelming majority of companies have no formal limits in place to monitor or limit usage of wireless devices, and only 1/3 of companies set some form of limit on mobile, which is worrisome given the following statistics: • Wireless costs have exceeded landline costs (Gartner) • More than 70% of mobile employees make their own buying decisions on their mobile phones / plans (Gartner) • Two thirds of companies pay for 100% of mobile bills (Gartner and Aberdeen) • One quarter of all calls made on business cell phones are non-business related – company is paying for personal calls, data transfers, etc. (Gartner) As a result, companies, on average, are paying 25-55% more per minute than they should because they are unable to control wireless costs. The Complex Management Challenge In order to understand the importance of effectively managing mobile and wireless, it is first useful to examine why mobile and wireless is so much more difficult to manage than traditional telecom and data network environments. While voice and data are managed by specific departments, there is no clear “owner” of the mobile communications environment, and its various components cut across a number of departments—namely Procurement, Telecom, IT, and Accounting. This lack of ownership stems from the initial emergence of cell phone use in the workplace where individuals began using cell phones as a convenience rather than a work tool. As a result, the business processes for mobile management were never established and are highly decentralized, making it difficult to pin down who should manage the problem—is it Procurement? Telecom? IT? Another challenge that emerges is that mobile & wireless devices require both corporate control and individualized service—in terms of managing inventory, assessing usage patterns, and optimized sourcing strategies (on the corporate side), and selecting device features, functionality and types of plans (on an individual level). For a glimpse into the complexity as it would apply to a particular organization, consider the following: Managing your Mobile and Wireless Spend: A “How To” Guide for the Enterprise Wireless Solves one Problem... Companies that have deployed mobile field service solutions have realized, on average, a 27% improvement in worker productivity, 19% in customer satisfaction/retention, 17% in overall profitabil- ity, and 13% in service revenues. (Aberdeen Group) ...and Causes Another. On average, companies are paying 25-55% more per minute than they should because they are unable to control wireless costs. • How many wireless devices are sanctioned for use in your company? • What is your monthly expense for your mobile employees? • Do you have a published corporate wireless policy? • Is your average per minute usage cost at market rates? • Which employees may be creating corporate liabilities by misusing corporate assets? • Are your mobile users’ usage patterns optimized? • Are you paying for unused, broken, or lost mobile assets? © 2006 Avotus Corporation
  4. 4. Managing your Mobile and Wireless Spend: A “How To” Guide for the Enterprise Complexity of Managing Mobile and Wireless: • Enforcing purchasing policies • Allocating costs within the organization • Tracking and recovering assets • Validating bills • Improving customer service • Reducing costs of service • Reducing costs of support • Establishing baselines for negotiating contracts • Auditing and complying with security, legal, and regulatory requirements related to communications © 2006 Avotus Corporation Most companies today do not have the answers to all these questions, and if they do, chances are they don’t have much confidence in their responses. This creates a complex management challenge: The concern over the ex- panding mobile environment, the growing demands and involvement from IT to manage the communications, not only at a voice level but at a data level, while worrying about costs, compliance issues for audit regulations, and making sure the vendors are proving the right bills and level of service. All these factors make it a tough environment to manage. What’s Being Done Today A great disparity exists between how mobile and wireless should be managed, and how it is currently being managed. Most companies today allow individual purchase decisions. Though sometimes driven by a small corporate discount, these plans are still optimized by the individual—not the enterprise. These are paid for through the organization’s T&E expense line, so that the respon- sibility lies within the organization processing the costs, leaving no overall corporate visibility or opportunity for optimization. In addition, there’s minimal bill validation or usage enforcement. This alludes to the fact that there is no real management—mobile expenses are merely a function of T&E accounting and are not being optimized throughout the organization. The problem with T&E reports is that there is no indication of the device’s capabilities, software levels, or sanctioned use; no voice or data plans identified; no view of contract length; no view of usage patterns; and it is spread across hundreds, if not thousands, of T&E reports each month. As a result, it is impossible to quantify and understand an organization’s mobile requirements, aggregate buying power, enforce policy and find violations. Factors Compelling Improvement Some of the specific factors compelling improvement include: • Wireless costs are increasing and becoming a much larger percentage of telecom spend and have overtaken wire line services • Adoption of new wireless devices and services or expiration of current contracts provides impetus to get processes and costs under control • Security concerns increase as more data devices penetrate the organization, particularly around wireless e-mail and other corporate applications • Anecdotal awareness that a large percentage of wireless is not centrally managed The Solution: A step-by-step approach Step 1: Understand your needs The first thing an organization should do is get a handle on inventory. Without understanding what the organization is paying for, it is very difficult to gain control. The best approach is to address areas one at a time. It generally makes the most sense to start with data devices, as IT probably has the most information about these. Next comes those areas within the organization that
  5. 5. Managing your Mobile and Wireless Spend: A “How To” Guide for the Enterprise © 2006 Avotus Corporation have heavy use, such as customer-facing sectors, followed by the mobile workforce, such as field sales. Data should then be gathered on the rest of the workforce’s mobile use. Once an organization has the needed inventory, the data should be maintained as an independent record of asset ownership. The next step is to get a handle on the usage of these devices by moving billing away from T&E and onto a workflow that allows greater visibility and involves corporate liability. This information should be aggregated and moved to electronic billing as a source of usage data that can help understand current usage to plan for current and future needs. Virtually all carriers have the option to provide billing data electronically, and tools should be developed to analyze usage for patterns, policy adherence, and abuse. The third element in understanding the organization’s needs is to examine the commitments and technologies, including the carrier’s ability to: • Cover the needed geographic regions • Provide the required service levels • Offer appropriate contracts, plans and deals • Satisfy the organization’s device/equipment needs Step 2: Consolidate and Standardize One of the most challenging aspects that must be decided upon is establish- ing clear ownership for the wireless environment—including budget and policy issues—as well as establishing and enforcing a wireless management policy, which provides the framework for gaining control of the environment. Another factor that can help is to reduce the number of carriers to one or two, depending on their geographic coverage, special features, and so on. Understanding usage patterns, the way people work, how devices are being used, and applications that need to be accessed, are factors that help in developing device plans and packages that are suitable to a person’s role in the organization. As far as data-capable devices, it is important to examine software and security levels. The newest smart phones that are web-enabled contain the same computing power as laptops and PC’s did ten years go. As they become a greater part of the infrastructure, the software needs to be managed. Step 3: Develop a Sourcing Strategy Once there is a solid understanding of the environment and decisions about what kind of policies to enforce, the next step is to understand the different carrier offers. The three types of offers are: Bucket Plans – These are the standard plans that come with a monthly fee and a certain amount of minutes and data transfer. Pooled Plans – Similar to a bucket plan, but a heavy mobile user can “carry along” some lighter users within the same plan to provide services for occasional users at little or no cost. Flat Rate Plans – Charge a per-minute charge for service and are much simpler to manage, but the carriers generally don’t advertise. Once the appropriate offer is selected, the next step is to eliminate obstacles of moving to new supply channels by examining the current commitments of contracts, early termination fees (ETF’s), and coterminous contracts, so that a new device doesn’t entail a new contract but rather is aligned with the expiration of the major service agreement. “52% of enterprises have no formal wireless cost management program and another 21% have a program that is less then 1 year old.” --Aberdeen Group
  6. 6. Managing your Mobile and Wireless Spend: A “How To” Guide for the Enterprise Benefits of Flat-rate Plans • Pay as you go • Simple low-cost fixed rate per minute per carrier • Uniform rates • Client selections are simple • No plans to manage, no buckets, no pools • Simplified chargeback • Improved service SLA’s, coverage and KPIs © 2006 Avotus Corporation Carrier Advantage: The Breakage Game Before choosing a plan, it helps to consider the business from the carrier side. Plans are designed to make money when a user is on plan; they are designed to make even more money when a user goes over or under use. Bucket plans create the most opportunity for overage and underage, and for that reason, should be avoided in most cases. While pooled plans help mitigate underage losses, overage is still a problem. Thus, the ideal option is generally the flat rate plan, where it is possible to improve and negotiate service SLA’s, coverage, and other key performance indicators (KPI) against which to measure the carriers. All carriers have flat rate plans, but they generally don’t advertise them, so it is important to ask. However, this is not always an option for organizations with low volume or few users. Of course there are always exceptions. For example, if usage patterns indicate that certain employees only use their mobile device during non-business hours, a bucket plan with free nights and weekends might be more cost-effective. Again, having a good understanding of usage patterns and needs helps guide such decisions. Step 4: Conduct and Conclude wireless contract negotiations faster The average wireless communication negotiation takes anywhere from two to six months, but it is recommended to move negotiation time closer to two. Online RFP’s and reverse auction tools are the best way to go about this, as they: • Make the process faster and more efficient • Level the playing field • Spur competition between carriers
  7. 7. Managing your Mobile and Wireless Spend: A “How To” Guide for the Enterprise © 2006 Avotus Corporation It is also important to remember that the carriers are providing a service and should therefore help fulfill the needs of your organization. Thus, when preparing an RFP, the organization should ask the carriers for what they want—not what the carriers offer. If the carriers feel the business is theirs to win or lose, they will improve service level offerings and lower their prices. Step 5: Management and Optimization Once the negotiations conclude, the outcome must be made a reality. The implementation of any contractual arrangement must be managed from start to finish: The orders must be placed to move people to new plans, new devices must be delivered and ensured that the capabilities are functioning properly, and billing must be verified to match what was negotiated. Tools must be deployed to enforce policy and manage contracts; many companies are looking into self-service portals so that individual employees do not have to rely on others to submit their orders. Invoice management is another important factor for receiving, verifying, and processing invoices effectively and analyzing usage. It is also important to review usage and market movement and take advantage when warranted. Carriers constantly come out with new devices and plans, allowing for changes to further optimize the wireless environment. Thus, a competitive look back or benchmarking should be incorporated into a review of wireless management policies and procedures that compel the carrier to change their rates if the market dictates. Wireless is moving towards more of a corporate liability. With that liability comes the responsibility for support. Individuals will need help with their devices, necessitating in-house or outsourced technical competence to manage the different kinds of devices, operating systems used by the devices, the different actions that an individual can take to unintentionally harm or damage those individual devices, and the data stored on the devices. Avotus’ Mobile and Wireless Solution Avotus’ Mobile and Wireless Management solution works to assist you in implementing the steps described above. Avotus works with you through each of these steps using processes as follows: Step 1: Understand your Needs – Gather inventory through looking at electronic and paper bills, building inventory, conducting callout programs to establish an independent source of inventory. Step 2: Consolidate and Standardize – Once there is a clear understanding of the kinds of phones and plans being used, as well as usage patterns, Avotus helps define and deploy a wireless policy to align wireless communications capabilities with the organization’s goals. Step 3 and 4: Develop and Execute a Sourcing Strategy – Avotus helps negotiate wireless contracts—whether they’re pooled plans, bucket plans, or fixed rate plans to attain the optimum level of spend.
  8. 8. Managing your Mobile and Wireless Spend: A “How To” Guide for the Enterprise © 2006 Avotus Corporation Step 5: Management and Optimization – Avotus has a contact center that facilitates the process of establishing support as well as purchasing and delivery, technical support, device return and repair, and logistics to make sure the wireless environment operates smoothly and users are satisfied. Avotus’ Intelligent Communications Management™ (ICM) is the foundation for the mobile and wireless platform that helps manage the back office duties of accepting and managing the billing, collecting and reporting on usage, maintaining the integrity of the inventory data, and managing issues and disputes around the telecom expense management environment—all of which is augmented by a business intelligence capability that produces best practice reports and allows the organization to manage and analyze the environment in an optimal way. This includes the ability to drill down into details, discern patterns, see the variances, and understand the trends in order to be proactive in managing expenses and liabilities and taking control of the organization’s mobile and wireless environment. About Avotus Avotus is changing the way companies source, procure, and manage their communications services and assets. Combining technology, automation, and domain expertise, Avotus is redefining industry best practices. Avo- tus solutions eliminate the wasted time and hassle usually associated with contracting for new communications services and products and renegotiating existing or expiring agreements. Automated invoice processing, inventory management, comprehensive spend management and reporting enable Avotus customers to realize significant initial spend reduction and achieve ongoing visibility, cost containment, policy adherence, and process improve- ments without operational overhead or capital investment. Avotus has a 20-year history of empowering companies of all sizes to gain lasting control over their complete worldwide communications environment through the effective management of their voice, mobile and wireless, data and converged communications spend. For more information about Avotus Telecommunications Expense Management Solutions, please visit: or call: 1.877.AVOTUS.1 ®