The Hidden Costs of Enterprise Mobility
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Notebook computers. Mobile telephones. Handhelds and personal digital assistants.
In the third quarter of 2007, research firm IDC reported that sales of notebooks and other portables leapt 37 percent on a worldwide basis, the biggest quarterly increase in more than a decade. Approximately 110.3 million units were shipped in the United States alone. For the same period, another research firmGartnerpegged worldwide sales of mobile phones at an astonishing 289 million, up 15 percent from the year before.
Clearly, mobile technologies are virtually indispensable tools for businesses of every size, and that is causing an associated increase in spending for mobile voice and data communications services.
A survey of more than 1,000 technology decision-makers by Forrester Research released in mid-2007 projected that spending for mobile voice, equipment, and data service would grow to 29 percent of overall enterprise network and telecommunications budgets, up from 26 percent in 2006. Fully 63 percent of the enterprises surveyed by Forrester believed they would boost spending on mobile data services over the next 12 months, while 56 percent expected to increase voice spending.
But, thats just the spending thats currently under their direct control; experts suggest that network and IT managers arent fully aware of the true costs of enterprise mobility. By getting a better handle on those expenses and helping businesses control themwithout jeopardizing true mobile accessIT managers can have a direct, positive impact on their companies bottom line.
State of denial
Most IT organizations have been in a state of denial, says David Hall, senior vice president and chief technology officer for CompuCom, a US provider of technology services with headquarters in Dallas, Texas.
The problem, as Mr. Hall sees it, is that while most businesses today practically require broadband connectivity of their employeesbecause of the size of e-mails and the pace by which decisions are made at all hours of the dayfew actually have a corporate policy for managing the costs associated with access any time, any where. Thats because few companies have stepped back to consider the various cost items buried in travel expense reports or as part of incidental connectivity charges paid on a department-by-department basis or even in the form of support calls to the corporate technology help desk when an employee finds himself or herself unable to connect on the road.
Companies dont really go back and pull together and look at what theyre spending, Mr. Hall says.
The good news is that the timing is right for IT managers to approach executive management about digging up this sort of information and setting a corporate-wide mobile strategy. The Forrester survey reported that centralizing management of mobile devices was a priority for fully 41 percent of its survey respondents.
So, how can IT managers help their companies identify and get a handle on these hidden costs? The following is a discussion of some trends that impact corporate mobility strategies. By considering how these developments might affect your company, IT teams can collect useful fodder that will help make the case with upper management for a centralized mobile access strategy.
The I Must Have It syndrome
BlackBerrys, Treos, as well as Windows and Symbian-based smart phones that combine voice calling features with data connection capabilities seem to have become practically ubiquitous among traveling executives. The problem is that few actually walk in the front door of companies as a sanctioned IT requisition. Because they help boost productivity, many companies turn a blind eye. That is, until these workers start using these devices to access the corporate network, especially for applications such as wireless e-mail.
Executives have found they cant get along without them, and the check to approve it comes because it was a benefit to the company. But if you dont plan for it, it will blindside you, notes Gerry Purdy, chief analyst for mobile and wireless at Frost & Sullivan, Palo Alto, Calif.
The extent of those extra costs can easily run an organization upwards of $120 per month per smartphone user, depending on the wireless service carrier with which they have their contract. Another culprit comes in the form of modem cards for broadband services, which a growing number of road warriors are using to supplement other forms of ad hoc connectivity, such as Wi-Fi wireless networks and wired broadband service, both of which are increasingly available in hotels that cater to business clientele. Broadband wireless cards can easily add $50 to $60 per month to a typical mobile phone bill, according to CompuComs Mr. Hall.
His organization keeps a lid on these expenses by negotiating corporate-level contracts with wireless carriers and assigning these cards to certain individuals who are deemed to be frequent travelers.
But even then, there are still a lot of costs that fly under the radar, Mr. Hall says.
Frank Albi, president and chief operating officer of Inacom Information Systems, a technology consulting company in Madison, Wis., likewise believes that broadband wireless cards are invaluableprovided your company has a strategy in place to manage how they are used.
What organizations tend to struggle with is how to support what Id call these true forms of mobility, the ones that give you flexibility, Mr. Albi says.
Inacom moved last year to provide its entire workforce with broadband wireless access cards. One of Albis motives was to reduce support costs for notebooks and handheld devices.
There are compatibility issues with these cards depending on the type of operating systems and applications youre using, he says. His other motivation was to cut back on the ad hoc costs his field service force was incurring by connecting willy-nilly from Wi-Fi hotspots and in hotel rooms.
From home to hotspot
Which brings us to another key trend: the shift by companies of all sizes to offer flexible work arrangements to increasingly distributed workforces.
A recent survey by the Computing Technology Industry Association found that nearly 75 percent of small and midsize businesses (SMB) have at least one employee who telecommutes; on average, about 7 percent of their employees work from home at least once per week. The survey found, about 10 percent of the total SMB market is mobile. Overall, IDC predicts that mobile workers will account for about one-quarter of the global workforce by the end of 2009.
Not every mobile workers needs are the same. Road warriors, for example, spend most of their time un-tethered from any particular location. Day extenders or tele-workers, on the other hand, generally work in an office, but need access to the corporate network from home or other remote locations.
The one thing they have in common is that they require access to resources and applications on the corporate network, and they will opt for the simplest common denominator to get to them. That means these folks are racking up all sorts of random connectivity fees that may or may not be covered as part of a companys IT budget and that may differ from person to person in the same department. Consider that a day pass for many Wi-Fi networks in coffee shops, hotel lobbies, airport departure lounges, and other public spaces costs at least $10.00and costs in many European countries are significantly higher. If an employee is expensing the cost of a cable modem or DSL connection, this could easily run $50 per month.
The situation is compounded when you start considering cross-border travel situations, with the specter of international wireless roaming fees or, worse yet, wildly overpriced hotel operator services.
If you cant beat em, manage em
When all is said and done, the extra bills associated with supporting renegade wireless and broadband access can run an organization thousands of dollars a month in unmanaged fees.
Big companies expect to buy things at an enterprise rate, they dont expect to buy things at retail prices, observes Piero DePaoli, director of global product marketing for iPass in Redwood Shores, Calif., which provides a mobility management offering. The organization is paying significantly more dollars, but the costs are so spread out that they dont know all the costs they really have.
Inacoms Albi says it would be a mistake to try to squelch the communications and network access needs associated with what he calls true mobility. There isnt a business executive across any enterprise company that isnt eager for better access to their corporate data and resourcesfrom any where at any time.
The secret sauce is integration: being able to guarantee access to all sorts of disparate information when that information is needed, Mr. Albi says.
By looking outside the bounds of the IT organization to put a figure on these costs and devising better ways to control and manage themwithout making things harder for mobile workersIT teams can help keep their companies on the cutting edge of competition. The IT manager looks like a hero, Mr. DePaoli says.
How can an IT manager look like a mobility hero? One quick way is by reaching within your organization to identify some of these costs. One tool you can use is the Mobility Expense Calculator, which will help you understand which expensesfrom spot purchasing and subscriptions of multiple Wi-Fi hotspots to overseas tollsare a particular problem for your organization. Once you bring those hidden costs out into the open, youre on your way to making the case for a mobile management strategyone that is within your control without slowing down your business.
Joel Wachtler is VP of marketing and strategy of enterprise mobility services at iPass. This white paper will be available exclusively at Wi-FiPlanet until February 4, 2008.
 Worldwide Quarterly PC Tracker, IDC (December 2007)
 Gartner mobile devices research (November 2007)
 Buyers Yearn for Enterprise Mobility Leadership, Forrester Research, June 1, 2007
 Buyers Yearn for Enterprise Mobility Leadership, Forrester Research, June 1, 2007
 Computing Technology Industry Association (October 2007)