Wireless telecom costs are rising. While the price of a cellular minute hasn’t grown, businesses are increasingly adopting mobile devices, applications and data plans for their employees.
“The voice side of wireless is staying pretty consistent, but the data side, being SMS and e-mail and Internet browsing, is increasing…your telecom cellular expenses are going up because you’re adding more traffic to the data side,” said Roberta Fox, senior partner at Fox Group, a management consultant and analyst company based in Mount Albert, ON that specializes in technology, telecommunications and call centres.
Fox used to pay roughly $100-120 in monthly cellular costs per consultant. After adding data and Internet plans, her bills increased an additional $100-120 each month. But according to Fox, the offsets are worth the costs. “Do I mind the cost going up? A little bit, but the business benefits are certainly there.”
Being able to keep in touch and stay connected has lead to increased productivity and better customer service, she said.
Mobile devices are also extending the life of her in-house computer hardware. “The consultants are getting more of their e-mail on their Blackberrys, rather than buying new laptops and upgrading my PCs,” said Fox.
While businesses may justify their cellular expenses by recognizing the benefits mobile devices bring, they aren’t necessarily getting the most for their money. “From a cost perspective, [cellular] is the least managed and least scrutinized of any IT telecom expense,” said Fox. “It’s really quite bizarre that companies will scrutinize, get the best cost on computers, best cost on software and very few take a look at, and effectively manage, their cellular expenses.”
The average business user is looking at $100-120 a month in cellular expenses, said Fox. “That’s a lot of money that isn’t necessarily being effectively managed.”
According to Fox, businesses can save generally 15 to 20 per cent by effectively managing their wireless telecom costs.
Complexity in billing is often an obstacle to businesses getting the best rates. “We’ve done lots of audits and every time we do them, we can save clients money,” said Fox. “They can do it themselves, they just don’t know how to because the bills are very complex.”
A plethora of plans adds to the confusion. According to Fox Group research, there are more than 2,000 different cellular price programs from the various providers in Canada. “If you take a look at your bills and you have 50 people, you could be on 10 different plans,” said Fox. “To consolidate, you have to read through the telecom jargon and it’s not easy for regular business customers.
“Make sure you’re not spending more money managing the costs than the potential savings,” said Fox. For example, if it takes an employee one half hour each month to analyze their bill, highlight expenses, fill out the necessary form and have the form processed, it may cost the company $75 to save $12, she said. “It’s a delicate balance between managing your costs effectively.”
Companies often provide their employees with a $150 monthly reimbursement to avoid spending time analyzing the data, said Fox. Any expenses above that amount are the responsibility of the employee to pay.
Mismanagement of cellular expenses may not be the IT department’s fault. Cellular may not even be included in a company’s IT budget, said Fox. Some businesses feel cellular is a responsibility of the HR department, or facilities.
Fox offered three strategies for businesses looking to reduce their wireless telecom costs.
First, perform a thorough audit. Many companies across Canada have individual cellular plans rather than a corporate plan, she said. “A cellular price plan billed to each individual is not as cost-effective as getting a plan from a carrier for 20, 50, 100 or 1,000 people…take advantage of the company buying power.”
Second, develop and manage a cellular use policy. Some companies assume their employees are only using their devices for business, so they don’t define the rules, said Fox. “It may be personal expense that they’re paying for.”
Third, take a look at employee usage at least once a year to determine whether needs have changed. “Do an inquiry via the Web pages of the various providers,” said Fox. “They may be in the wrong price program.”
Businesses may want to consider outside help. “There’s lots of companies like Fox Group that will manage them for you,” said Fox. “It’s definitely worthwhile taking a look at.”
Telecommunications expense management (TEM) tools and services are designed to help businesses manage their wireline and/or wireless expenses. According to Fox, three factors help determine whether a business should consider TEM.
First, if the company has a high number of cell phone users (150-200 and up), it’s probably worth the time and effort, she said. Second, if the company has high usage ($300 per month per handset and up), TEM could help. And companies that depend on cellular technologies to run their business (such as trucking with dispatch or snow plow businesses) would also stand to gain. In this instance, it’s not only about expense, but cellular coverage and reliability, she said.
Businesses that don’t invest in TEM tools should at least perform an annual audit, Fox suggested.
According to TEM provider Rivermine, large enterprises may find it difficult to create solutions on their own. “Due to sheer volume of vendors, invoices and employees, it’s often difficult for companies to manage all their voice, data and wireless expenses,” states Rivermine’s site.
Rivermine’s EVP Jim Carroll outlined six key areas that impact the cost of wireless on an enterprise: cost avoidance, cost recovery, cost containment, cost allocation, cost deference and education and best practices.
Cost avoidance refers to recognizable areas on the bill that can be adjusted and fixed to save money going forward, said Carroll. Cost recovery includes audits and making sure companies are receiving their discounts and aren’t improperly billed.
According to Carroll, cost containment (usage and demand management) is becoming increasingly important. “In the past, most enterprises were saying, ‘Well, if you’re auditing us or if you’re optimizing our rates, we’re going to let people use them as much as they want.’ It’s becoming evident that there needs to be some management around that.”
Many carriers are now promoting pooled minute plans to businesses, said Carroll. “They’re promoting these because what the carriers are seeing is that usage, all in all, is starting to go up. The average minutes of use per user is rising, which is exactly what the carriers want to happen. They want consumers to consume more…Enterprises need to focus on this usage management and not just the dollars and cents side of telecom expense management.”
These six strategies are incorporated into Rivermine’s TEM solutions. For example, Rivermine operates wireless help desks for enterprises with services ranging from managing their Blackberry servers to managing all devices from procurement to disposal.
Rivermine provides both wireline and wireless expense management solutions under one roof, supported by the company’s merger with BBR Wireless Management last fall. The company’s latest TEM software platform, 6.0, was released on July 15. New features include a language translator and a completely redesigned user interface.
Rivermine’s wireless integration has acco