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Accessories – A Growing Element of Equipment Costs

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:Accessories

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.

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