Mobile phones are expensive. From smartphones to crummy "free with your plan" phones, it's a fact. For many people, their cell phone probably costs them more than Internet, landline, and cable television combined. Sorry big telecom companies, but it just seems like a lot.
On the business side, mobile phones are something of a necessary evil. Many cost-conscious organizations do what they can to reduce the number of employees with company-paid phones, but even so, there are positions that absolutely need them. I wrote a few days ago about using enterprise text messaging to reduce the need for smartphones, but even that solution will only work for a sliver of companies.
Compass Management Consulting recently put out a white paper that offers some advice for enterprises to significantly cut costs on company phones. (Registration is required to view the white paper.) I'll summarize the salient points below, along with what little personal insight I have to offer.
Enterprises: Switch to a Company-Wide Carrier!
For businesses with 500+ devices, switching to a company-wide plan with one carrier will spell huge cost savings. And, in addition to reducing the overall cost per person, this model will greatly simplify handling payments for all of these devices, plus provide much greater oversight into the mobile infrastructure of your organization. According to Compass, most enterprises have some devices under this type of model, plus some stragglers orbiting around the company outskirts if you will. (Well, the crummy analogy was mine.)
"Most typically, what we see happening is businesses creating a hybrid model where you have a large population of corporate-sponsored devices, typically BlackBerry devices centered around messaging, that type of thing, as well as some executive mobile phones," said John Lytle, lead consultant with Compass. "But then also, a large population of mobile devices, typically voice-type devices, that come in on expense reports, and just have no visibility from a management standpoint."
While it obviously varies significantly by company size, specific plans, etc., Lytle estimated that a company could go from $100 per device expense reimbursed to $70 per device in a corporate-sponsored system. One other really nice thing about this model is that minutes are pooled among all the phones, making overage charges a near impossibility, and creating massive efficiencies. (After all, those 2,000 minutes are a waste to the executive that uses the BlackBerry only for email—but meanwhile, you have those loud-mouth salespeople hogging ten employees' worth of minutes.)
Where to Start
Yeah, overhauling the whole company mobile setup could be a doozy. And if you have all these fragmented plans, you're going to have some that'll expire in six months and some that just started down the 2-year, soul-surrendering contract. For this situation, Lytle recommends overhauling as many to the new system as you can, and then continually adding new users as their contracts expire. It's a relief to hear that you can do that, because I can't imagine what all the fees would add up to otherwise.
Of course, the other end to this whole equation is making the switch happen. I've summarized Lytle's response on how a company could go about that here: "First, you get the new strategy out there—socialize it in the enterprise and get people used to the fact that it's going to occur. Two is finding the inventory—so, trying to understand who has the devices, who's getting them put in through expense reports vs. who has corporate devices, so getting a hold of how big of an opportunity is this, and quite often that requires a corporate finance group to keep track of how many people are submitting phone bills each month…. Ultimately, there's a change in corporate policy—how are you going to pay for these devices, how are you going to provide them, and under what guidelines? Then you can get into leveraging types of plans and usage."
Thoughts for Smaller Organizations
Honestly, I had every intention of coming back to you guys. So here's a few thoughts for how small to medium sized businesses can find some hidden cost savings.
- First off, check with your carrier of choice (or all the big ones) to see if there isn't still a managed model that could save you money. There's probably not much chance for an organization with five phones, but one with 100-500 might be able to use this model successfully still.
- Do a full inventory on all your phones with the following questions in mind: Do all of these employees need phones, and if so, do they need as robust of devices (such as smartphones), and are there any features I can remove?
- Make sure none of your employees are regularly going over their minutes, and formulate an immediate plan to nip that one in the bud. According to Lytle, the going rate for each minute over your plan is about 45 cents. Ouch!
- Talk to carriers and phone manufacturers to see if you can get bulk deals on new phones.
- Make a resolution to keep a watchful eye on your company's telecommunications spend. According to Lytle, some companies will spend as much as $500/month on one employee, between home Internet or phone service, work Internet and phone, plus mobile plans. Scrutinize these setups for ways to shave those monthly expenses—cutting down fixed costs is the key to recession-proofing your business.