Expense Management Best PracticesTopics: Telecom Expense Management
When I first joined the enterprise mobility management industry, it was shocking to find what a significant expense organizations encounter on a monthly basis towards their carrier (Verizon, AT&T, T-Mobile, Sprint etc.) spend. What was even more alarming was uncovering that very few organizations had identified budgets tied towards mobility. It had become a cost of doing business that was either absorbed by IT or distributed so precisely throughout every individual cost center within the company that it flew under the radar. We are seeing that mentality start to change as most of our customers are undergoing year over year organic growth in device quantities, huge spikes in data consumption, and increasingly more business cases where mobile devices are essential to daily operations…all of which are increasing how much organizations are investing in carrier connectivity. The challenge has become figuring out how to manage these skyrocketing expenses and how to measure success.
Expense Management is all about the data
Most organizations at this point have unlimited domestic voice and messaging and it is truly all about the data when it comes to their mobility spend. It is easy to understand why data is so important and usage continues to rise year over year with mobile playing an increasingly vital role in business run state through email, CRMs, and mission critical applications. That trend is not going to stop anytime soon with 63% of Millennials currently using work-related cellular data on a daily basis. According to Ericsson*, today the average smartphone uses 5.1 GB of data per month. In 2022, they expect mobile data traffic per smartphone in North America to reach 25 GB due to several factors such as the growing number of LTE subscriptions and the increase in data-intensive content.
With the heavy focus on data in expense management, it is important to monitor the high data users across your organization. While there can certainly be business reasons why someone may need to consume 80 GB of data in one month, we are not in 2022 yet. You are unlikely to get an individual to admit they streamed all 9 Seasons of The Office during work hours, but there is value is letting them know that it is on the radar. Productivity aside, the extreme high data users can single handedly raise data costs across the organization. If you find that you are raising your pool of shared data month after month and continually increasing your data plan costs, look no further than the small minority consuming more than their fair share of the pool. It may also be worth exploring a mobile security application such as Wandera, which allows you to set intelligent rules about which behaviors and sites are considered acceptable for business and gives you the power to enforce them. Wandera’s expense management helps you ensure usage is compliant and reduces legal exposure from illegal or unacceptable use.
An interesting trend for organizations that leverage devices solely for data-only to consider are mobile data service providers. DataXoom partners with AT&T, Verizon, and Sprint to help businesses manage usage and expenses for data-only mobile users. Not only do you have the advantage of being able to leverage any of the best networks, but there are no contracts and no termination fees. We have seen the most success for customers in the transportation industry where nationwide coverage is a must and the flexibility to turn data on/off without fees is a gamechanger.
Who Has Eyes on the Bills?
Unmanaged or even “part-time” managed mobile device spend can represent an enormous cost for your business. Managing and optimizing carrier spend is a full time job – one that we have spent many years perfecting. Having the time and effort dedicated is only aspect of the equation. The advantage that Vox Mobile expense management has is that we have the resources and access to an extensive library of carrier data, trending, and industry benchmarks that better equip us to consult our customers than a single individual within an organization would have visibility to. While we are fully carrier agnostic and don’t play favorites, we have built long-lasting partnerships with customers by serving as a second set of eyes to validate carrier proposals before they are implemented and then drive resolution to ensure that the savings are being recognized. We had a customer just this past week state that when his company went through a large scale acquisition, his decision to recommend Vox to analyze their carrier spend and subsequent 7-figure recognized savings was the precise reason he received a promotion.
Are managers aware and held accountable for their cost centers mobility spend? It’s unrealistic that a single person at your organization can be in tune with the usage pattern (or lack thereof) of every mobile device. While it is recommended to have someone internal that has a pulse on the health of the overall carrier spend, it is impractical to expect this individual to know the use case of every single device on the account. Managers on a monthly basis should have access to their team’s mobility spend either through automated reporting or through a web portal that can provide advanced trending analysis on demand. Areas that managers should be focused on would include:
- Zero usage lines. If repurposing a device is not an option, in almost all cases, it makes the most financial sense to pay an early termination fee with the carrier rather than pay the reoccurring monthly service fees for the rest of the contract term on an unused device.
- Devices assigned to employees that have left the company. (What happened to that device by the way?)
- Frequent high data offenders. From a cost and productivity standpoint, is the data usage reflective of the type of work required in their position?
One thing I like to say to our customers is that telecom expense management isn’t about beating up your carrier for lower prices. A bigger piece of expense management is understanding the market and what options are available to you. I hear frequently from customers during carrier contract talks phrases such as “we negotiated to get the iPhone for free”. What customers are starting to better understand is that the “free” device is not truly free. The full retail cost of the iPhone is baked into the reoccurring monthly services fees, which in some cases you end continuing to pay for the device well beyond the 24 month contract period so long as the user keeps their device. Instead, ask your carrier to provide you with unsubsidized pricing with the equipment excluded. Many organizations are instead choosing to purchase their devices from 3rd party providers or directly from the manufacturer. As a certified partner of Apple, Vox is able to secure the best available prices for carrier unlocked Apple hardware, as well as offer flexible payment and leasing options.
When is the last time you reviewed your mobile policy around international travel? International service fees can be very costly, even more so when someone travels overseas without an international plan in place. In most cases, the carrier cannot go back and adjust the charges. It is vital that your end users have a clear policy around international travel and know the process for who to contact before they leave. Many of the carriers have started to introduce $0 international add-on features that apply in most countries which charges a more reasonable daily rate for any voice, data, or messaging usage for only the days that the user is out of the country. It is recommended that you complete a monthly audit to ensure every line of service on your account has the international feature added.
Unused and unnecessary features are an often-overlooked cost that can add up over time. The trick is that carriers will often offer add-on features for a free trial period. Once the trial expires, the cost for the feature kicks in without a reminder or notification. Our spend optimization service audits each individual line on the account to ensure these unapproved features are removed. It’s also important to safeguard the front end by implementing and enforcing policies that prevent unnecessary features from being added in the first place.
Piecing the puzzle together to figure out how to best optimize your carrier spend can be overwhelming and leave organizations unsure of what piece to begin with. Where Vox Mobile can assist is we are always willing to provide a free one-time assessment of your carrier bills. Our expense management analysts will assess where you are at today as compared to industry benchmarks and best practices and report back the amount of potential savings that could be recognized. At a worst case scenario, our expense management team will be able to provide validation for your leadership team that your carrier spend is in line with the industry. Click here to request a demo
https://www.ericsson.com/en/mobility-report/future-mobile-data-usage-and-traffic-growth – In 2022, monthly mobile data traffic per active smartphone in North America will reach 25 GB