Practical Cost Reduction Ideas
Does your company have adequate checks and balances to catch those employees that order every accessory available just because they were offered on your ordering portal? With all the challenges facing wireless administrators, monitoring the buying patterns related to accessory purchases may not be high on their to-do list. Even in situations where management is approving orders and accessories we find that the steady influx of what seems like an insignificant cost compared to the cost of the primary device can accumulate over time to become a sizeable expense. While the cost of accessories in a single month may not raise alarm flags, those costs when accumulated over a year can become sufficiently large to justify attention.
It is important to view the accessory cost in its own context and not overlook these charges simply because they are dwarfed by an increasing cost of smartphones, iPhones and tablets. In one recent analysis we found that a company with reasonable set of corporate policies and order controls was still spending in excess of 20% of their monthly equipment budget on accessories alone. There are ways to manage more effectively the accessory purchase processes and the cost of accessories. Below are some steps to consider in bringing about a reduction in accessory expenses:
Control the Offered Accessories – if you are using an internal ordering portal or utilizing one from an Enterprise Mobility Management vendor, you will want to be careful to limit the number and type of available accessories. It is not unreasonable to require employees to purchase accessories beyond the staple items like chargers, batteries and protective cases. Whether you’ve adopted a cost sharing strategy with employees under BYOD (Bring Your Own Device) for handsets and data plans, accessories are a safe place to begin.
Ensure Visibility of Accessory Order Details – when management is part of the approval process, a clear delineation of the ordered accessories will be important to eliminating those that make it through the process just because they were a small portion of the overall approved cost. Your approval workflow processes should include a clear delineation of the number and types of accessories ordered.
Consider Sourcing 3rd Party Accessories – Carriers make considerable margin on accessories. It is an easy choice for buyers once they have selected their carrier and mobile device to throw in a few accessories that they might need down the road. As such, the carriers face little competitive pressure on accessory pricing. There is a certain convenience in ordering accessories from your carrier but you are paying for that convenience. Some estimates have shown as much as a 50% savings on accessory cost when using third-party vendors. It can be challenging to source a reliable accessory vendor that will work with your employee needs and who can provide easy ordering capability. In addition, it is usually the case that you will want these accessory charges incorporated in your device Account Payable allocations. Most Enterprise Mobility Management solutions do make accommodations that will allow the appropriate assignment of charges for accessories even though they do not appear on your carrier invoice.
For a company with 2000 wireless devices that spends 5% – 10% monthly on equipment costs this can translate into $12k – $15k a month. If 25% of that cost is accessory expense, this can approach $50k/year. Saving $25k a year or more can be worth the effort to consider instigating enforceable accessory policies and to entertain a third-party source for acquiring accessories.
Group Data Sharing is the New Carrier Direction
There is a shift unfolding on the wireless landscape. The Tier 1 carriers are providing new plans, not only to business, but to individuals and groups of individuals (families). There is not an industry name yet, but we refer to this as Group Data Sharing. AT&T calls theirs Mobile Share Value Plans, while Verizon refers to them as More Everything Plans. Both carriers’ plans are similar for individuals, small family-like groups and for businesses. What is different about these plans is that they are sharing data (data only); voice and text are included and unlimited. For a group, the amount of data required is selected and then there is small access fee for each device that is a member of the group. The carriers are interested in securing a new billing model that is centered on data rather than voice, and are making this new approach very worthwhile to new and current customers previously using voice centric plans.
Both Verizon and AT&T have previously announced their intent to deliver VoLTE (Voice over LTE). When their engineering organizations have reached the required quality levels, the voice traffic will become part of the data usage. How can businesses take advantage of these changes? If your average data usage per device is modest and if your device population is not high (less than 3K total devices) you may find you can reduce your bill significantly with Group Data Sharing plans.
Last week, Verizon announced that their More Everything business plans now would support groups of 100 devices. This is a significant step towards making this viable to business. What started as 10 for families grew to 25, then 50 and now up to 100 devices can pool their data with unlimited voice and text.
Because these plans are relatively new, Verizon initially announced their plans in the summer of 2012, not all organizations are familiar with the benefits. AT&T announced Mobile Share Value plans at the end of 2013 and started with a maximum for each group of 25 devices, which matched the Verizon plans at the time.
If you haven‘t looked at these plans for your Corporate Liable devices, you will be surprised at the impact it will have on your monthly invoices.
Finally, Carriers are Providing Options
International wireless travel charges are one of the most frequent surprises on company invoices. Whether it comes in the form of one rogue employee on vacation or from a steady flow of legitimate but unmanaged executive wireless travel usage, an increasing portion of wireless invoices are international charges. There are no simple features to address international voice charges but there are ways to at least mitigate international messaging and data charges. The most shocking charges we’ve seen on client invoices come from international data usage. Recently one user managed to generate over $24,000 in international data overage charges – a situation that could have been controlled and substantially minimized if proactive action had been taken.
There are two ways in which international charges can accumulate unneeded costs on your invoice. First, the most obvious and painful charges accrue from individuals using international voice, messaging, or data while roaming on pay-as-you-go rates. The second often arises from overreaction to overage surprises, where administrators permanently place international add-on features on users that tend to travel frequently. While these charges are usually smaller than the overage surprises, they continue to accrue month after month whether an individual is traveling or not. A $120 international data option left on a device when it is not needed will more than double the monthly cost of that device.
Fortunately there are solutions and methodologies to limit the damage to your invoice from international charges.
Partial Month International Features – For some time now, U.S. carriers have not forced international data and messaging options to span an entire bill cycle. Plans may now be turned on and off for periods of just a few days and the user only pays for that portion of the monthly fee when the option is enabled. When using only partial month features make sure that you factor in the fact that the included feature amount will also be prorated – 3 days in a month will provide only 1/10th of the indicated units included. Carriers are also permitting the ability to assign the option retroactively as long as the bill cycle has not lapsed. If you received notification to add a feature after the traveler has left the country you can back date the effective start date to cover any use already incurred, an unusually generous carrier consideration.
Capping the Option Time Period – Carriers now permit a preset end-of-feature date when it will come off of the device. If the employee has communicated their travel window, the options can be put into effect for only the days needed. Leaving international features on devices that don’t experience constant travel needs can be expensive. If your Mobility Management Solution doesn’t scan for unused features, you will be well served to always list an end-of-feature date when turning on international features in the carrier portals.
Provisioning Work Flow – The Best-in-Class approach to managing international feature additions and removals is to have the functionality to request these changes via an ordering portal that is available to end users. End users will know best their travel schedule and giving them the opportunity to submit those requests themselves will be the most efficient. Your provisioning system should support the ability to provide start and end dates to the travel schedule so that those fulfilling the request can preset the end date of the international feature.
These few simple tips can result in large savings on your carrier bills.