Slaying the mobile telecom expense monster

Yikes! When I detailed the many ways that vendors were trying to scare IT into wasting time and money on dubious BYOD “solutions” or treating all users as if they were (expensive) edge cases, I expected some pushback. And I got some, as well as some “thanks for calling these carpetbagggers” responses. But what surprised me was where the pushback was focused: on TEM (telecom expense management), which is really a purchasing issue, not an IT one.

I get that IT may be asked to implement the systems to implement TEM tools, especially as several MDM (mobile device management) vendors include some TEM capabilities in their wares. In many cases, the job is simply dumped on IT, rather than being driven from the CFO’s office, where the buck should stop when it comes to spend management. I suspect some in IT like to own TEM because they can show a hard dollar savings from their work, unless in the cases of better management, support, or security.

[ Learn how not to screw up a BYOD rollout and how to address the legal concerns around BYOD. ]

Most of the pushback came from the vendors trying to tell IT to buy expensive technology to monitor employees’ smartphone and tablet use to detect when they left the country and would incur international roaming charges by not turning off their cellular radios. I had suggested that the cost of the prevention was usually worse than the cost of the overruns, and that other methods were cheaper and more effective in a BYOD scenario.

So let’s get into the issues.

First, my context was BYOD usage, but most of the critiques came from vendors relating the roaming-charge horror stories of corporate-managed devices (that is, not BYOD scenarios) where the company provisioned not only the devices but the voice and data plans. Of course it makes sense for a company to manage the expenses it incurs, and if you have a lot of corporate-provisioned cellular devices, you’ll want to explore whether you can get better savings from standardizing on a single carrier and implementing tools that enforce policies around international roaming and monitor when devices aren’t being used but stll rack up monthly service fees.

But whether the employee buys the device, chooses the device, or is issued a predetermined device doesn’t matter. The real question is what telecom charges need to be managed and by whom. So let’s put BYOD aside and figure out just what IT needs to do in regards to TEM. As in most issues IT has to address, context is critical.

If you have a large number of mobile employees….
Let’s say you have thousands of people who need to use a smartphone or tablet as part of their jobs: beer distributors, on-site repair staff, pharmaceutical sales, management consultants, auditors, and so on. Chances are you’re not doing BYOD for these folks, even if you let them choose the type of smartphone they prefer. You pay for and provision the devices, and you set up the cellular plans.

In that case, you certainly need a way of managing your cellular contracts and tracking the devices whose plans you’re paying for to make sure service is discontinued when employees leave, as the carriers are notorious for mistaken billing that works out to their advantage. That’s why the TEM business has existed with so many providers for more than a decade. It’s a purchasing management issue, fundamentally, that may need IT support.

The big scare factor in TEM is international roaming charges. One vendor relayed me several horror stories of large companies wasting tens of thousands of dollars a year as employees ran up huge roaming charges when abroad, out of ignorance. The answer of course was to implement the vendor’s TEM-oriented MDM tool. But the numbers rarely add up. Per-device license fees run $60 to $125 per year in most cases. If you have 5,000 employees (the number cited by this vendor in its examples), you’re shelling out $300,000 to $625,000 per year (assuming they have just one corporate-paid data plan each) to avoid anywhere from $30,000 to $200,000 in unnecessary international roaming costs. That doesn’t make sense, does it?

What would make sense is if you are employing MDM anyhow for its other management and security capabilities on all those devices that you favor providers whose MDM tools also check roaming status and send the users a note telling them to turn off data roaming when abroad. Or you might negotiate international roaming rates with your carrier if you have that scale of users on their network under a corporatewide plan. But citing international roaming costs as a reason to do MDM is silly. That can be a fringe benefit of MDM, but not its justification. And remember: These MDM tools can’t handle your carrier contracts or monitor your “ghost” devices; you still need to do that as part of your purchasing management, with or without a TEM cosultant.

If you have BYOD users in addition to the corporate-managed users, the MDM tools apply to the BYOD users’ devices, but of course your carrier contracts and TEM activities outside of roaming monitoring don’t apply. As the whole point of BYOD is to let users lead on technology, they’ll pick the data plans that they want to pay for, and you’ll have (or should have) a policy as to what you’ll reimburse (if any) that ensures you’re not payng more than you choose. It’ll take one BYOD user who gets a $3,000 bill for roaming when in, say, Japan to make it clear where the responsibility lies.

In fact, that policy should apply to corporate-managed users. Why should their department pay for out-of-policy expenses? That will quickly lead to the behavior you want. I find it ironic that so many IT pros and purchasing managers want to automate away the users’ responsibility, then get upset when the users act irresponsibly. If the bills are invisible, how would they even know they’re wasting money?

And don’t forget the low-tech approach: Don’t issue international-roaming-capable devices to your employees who don’t travel abroad; instead, have some loaners for those who do occasionally. I realize that the iPhone 4S now offers international roaming as a standard, but older iPhones (which are still sold) do not, and many Android devices are not world phones.

You really need to understand the total cost of management, not just the cost of nonmanagement. For example, maybe only 500 of the 5,000 employees need data plans for work. That means you don’t have an MDM tool for 4,500 of them to check if they’re roaming abroad and will need to rely on a corporate international roaming plan for them and your 500 data-using mobile employees. Maybe a separate MDM tool is too pricey for just 500 users, so you rely on Exchange for the management and security and handle these 500 as “regular price” corporate-managed devices or as BYOD users who get a stipend for data service each month. You rely on education and nonreimbursement of excess costs to manage their international roaming charges and “ghost” device charges.

If you have hundreds of mobile employees
Most companies don’t have many thousands of employees. They have dozens or hundreds, maybe a few thousand. But the vendor stories out there are about companes with tens of thousands of users, where it makes more sense to have central management and oversight (whether in IT or purchasing) given the scale of the deployment.

Of course, you have the same options as the larger companies that I just described. But your per-seat MDM licenses will be higher the fewer seats you have, and you’ll get fewer discounts from your carrier for corporate-managed employees. The large-company approach simply may not work for you.

Again, if you’re deploying an MDM tool — rather than using the essentially free built-in capabilities of an Exchange server — and you have a segment of your users who travel internationally a lot, it makes sense to favor a TEM-oriented MDM tool to monitor international roaming. But you’re less likely to be able to take advantage of lower-cost carrier international roaming plans at that small scale. And it’s harder to justify the reliance on a single carrier for your mobile employees that you would need to enter those discussions.

In fact, at this scale, a single-carrier plan can cost you much more than a BYOD approach. You’ll need to run the numbers, but where BYOD tends to win out is if your employees use family plans. The typical family plan charges $15 (including taxes) per additional line and may require an increase in allowable minutes if people talk a lot. If you set your BYOD reimbursement to $20 for voice, that would map to the typical out-of-pocket cost in this scenario. (Yes, I know that appears to favor families over singles and childless couples, but remember that family plans aren’t restrcited to people at the same address, so singles and couples can add siblings, parents, cousins, and so on to achieve the same discounts.)

Then there’s the data cost. The math is different here; we don’t yet have family plans for data usage, just flat tiers per device. You may save some money if you get data plans in bulk from a carrier, but remember that many carriers tack on $10 per month per use for “corporate email” (one of the greatest ripoffs ever). A user who gets his or her own device and signs up for the standard data plan avoids that surcharge. Plus, data plans require explicit permission to renew if used within their contract period, so the spectre of heavy users unknowingly running up huge overage bills is a nonissue — they have to agree to buy more data, and a company should have a policy that it enforces about that.

After you’ve done the math, can you get a better deal from your carrier? If so,  and if its areas of decent coverage map to where your employees are, the carrier may be a better option. Just be sure to monitor the bills — a feature you get for free in a BYOD scenario where employees pay the bill.

When a carrier roaming plan doesn’t make sense, remember that travelers can easily pick up foreign SIMs when traveling (often at the airport or near their hotel), and reuse them when they go back to a country.

Some people tell me executives are too stupid or lazy to do this. If they are, they shouldn’t be execs, especially if they’re running a smaller company where everyone needs to be versatile. They may need help the first time, and they may need an assistant to do the legwork for them (such as order them the SIM or have it ready at their hotel), but that doesn’t mean they can’t pop out a SIM, pop in the country-specific one, and activate their device, or have whoever is accompanying them do it. Let’s be honest: It’s no more work than getting foreign currency or renting a car, which presumably they are expected and trusted to do. Europeans frequently carry multiple SIMs to deal with the roaming-charges issue, and there’s no reason Americans and Canadians can’t do the same.

If you have a small number of mobile employees
This is the easiest case. Go all-BYOD, establish reimbursement policies, and educate users about pitfalls — and consequences — of international data roaming.

Develop the right strategy for your specific situation
No matter how many users you have, employees have brains and should be expected to use them. The more people involved, the more it makes sense to augment how you manage those people with technology tools. And the more it can make sense to handle the whole purchasing and provisioning effort centrally. Just don’t apply the vendors’ use cases blindly to your situation.

Every company is different and should think through its purchasing, management, policy, and technology strateges accordingly. If you don’t, the total cost of management is likely to be much higher than what you save from that management.