Costs of mobility vex CFOs, CIOs


How much does mobility really cost? CIOs and CFOs have different perceptions and priorities in this area, according to a recent study by CFO Research Services, the research arm of CFO Magazine, and Fiberlink Communications Group, a managed services provider based in Blue Bell, Pa.

The study polled 120 finance and IT executives based in the U.S. to determine their views on the matter.

The study reveals that few CFOs need to be sold on the idea that mobile working increases productivity .

About 75 per cent of finance respondents said they expected their companies to equip more workers with mobile gear in the future.

“In the last few years, finance has come around to the belief that they should give users productivity tools,” says Ed McCrossen, president of Fiberlink. “But these productivity costs [are rising] and we think they will continue to rise at rates that are not being captured centrally as IT spend.”

The need to manage the costs of an ever-increasing mass of professional and knowledge workers going mobile is becoming a big headache for both finance and IT departments. And the survey revealed some sharply differing views in certain areas.

The majority of finance executives (64 per cent) said they didn’t have a confident estimate of the total per-user costs. And 47 per cent disagreed with the statement that their areas had adequate information about remote access costs. But 50 per cent of IT respondents said finance had adequate information about this.

“Historically, IT access to spend has been on dial-up,” says McCrossen, explaining the disconnect. This was typically a controllable IT budget that tracked centralized purchases from a telecom provider. As both the cost of dial-up and the cost per minute continue to drop, this category of cost is declining.

“But the costs of the roaming Wi-Fi user, hotel broadband user, the person buying a cellular card from Verizon, those costs tend to be expensed,” he says. These costs are rising, but are typically buried in data processing, travel and expense reports in departmental silos.

“Eventually, finance or some other senior executive will say, ‘I’m seeing other mobile costs burn holes in the pockets of my departments – and you, Mr. IT, or someone is going to take ownership of this.'”

The mobility sector is in the greatest state of flux relative to other areas of technology, says Carmi Levy, senior research analyst at the Info-Tech Research Group based in London, Ont. These types of debacles will likely arise in many organizations that have little familiarity with mobility costs and haven’t institutionalized the right policy, reporting and control mechanisms.

“The desktop computer hasn’t changed significantly over the past few years,” he says. “But with mobility, we constantly see new form factors and means of connectivity. So business understanding of what constitutes a ‘standard package’ for a knowledge worker is not as evolved.”

The survey also revealed there is little industry consensus on what constitutes average costs. Finance executives were asked what they thought the average cost was to support each mobile worker per month. Seventy per cent estimated the costs at about $50 to $100.

“We talked to a variety of analysts during our briefings, and asked them if they thought this was a little or a lot,” says Jim Somers, vice-president of marketing at Fiberlink. “About half said it was a little, the other half said it was a lot.”

Levy agrees this is a reasonable ball park figure to start the discussion, but points out mobile services cover a huge space, from cell phones to BlackBerries to Wi-Fi laptops. “The reality is, this isn’t scientific at all. You need to go deeper to understand what those numbers are for each class of mobile technology.”

Differences in perspectives also emerged in the survey. Both finance and IT executives agree security for mobile devices is critical. But finance executives are primarily concerned with regulatory compliance, reasoning that exposing the company to liability defeats the purpose of offering remote access in the first place. IT executives are more concerned about managing the nuts and bolts of mobility in general and security in particular, while also minimizing IT support efforts.

About 42 per cent of finance executives said this difference in priorities is a significant problem at their companies, but only 13 per cent of IT executives said the same.

The survey highlights some concrete issues around IT and business alignment, which is often talked about as a big nebulous concept, says Levy.

“This is not just a CIO or CFO issue, it’s a corporate governance issue,” he says. “The entire C-level group needs to look at mobility from an enterprise perspective to ensure normalization of processes across departments.”

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