Managing Your Mobility Expenses—A CFO's Perspective
With a slowing economy and increasingly competitive business environment, IT and line-of-business managers have to tighten their belts yet again. So how do you fund strategic projects that advance your business without cutting back on the basic services employees need to stay productive?
Take control of your mobility budget. With new mobile devices and connectivity options coming online every day, mobility expenses can easily spiral out of control—with a large portion of these costs buried in expense reports. At iPass we call this the "mobility black budget."
As the CFO of iPass, I have a unique perspective on the issue. As you might expect, iPass itself embraces mobility, and we use iPass tools and services to control our own mobility costs. But more importantly, I also have the opportunity to meet with many customers—including some of the most successful businesses in the world. They've given me some creative ideas about controlling mobility costs.
Let me share some of the insights I've gained talking with these customers about their strategies for controlling enterprise mobility costs—insights that you might not hear from the technical side of iPass.
First, there's that mobility black budget. If you aren't giving all of your employees a service that will be there for them, they'll simply do whatever it takes to get connected—even if it means buying Wi-Fi day passes or 3G monthly subscriptions at full retail prices. In fact, you can be certain they already are, and that these costs are ending up buried in myriad expense reports across your company. Gartner recently estimated that, on average, 70 percent of mobility costs were accounted for in this way. This issue involves both cost and internal controls.
Even when employees use company-approved mobility services, you still need to understand the true costs of mobility—not just those that show up as equipment and service charges. When employees can't connect, there's lost productivity both for the employee and the Help Desk as they work to solve the problem. There are also lost opportunity costs, for example, when employees can't serve customer needs or close deals. These costs can be hard to define, but they directly affect your bottom line.
You need to find ways to estimate IT management costs, such as integration costs and service monitoring, as well as Finance and Accounts Payable costs for vendor management of service providers.
iPass has created a Web-based Mobility Expense Calculator to help you get a handle on the costs outside of your iPass contract and predict future mobility expenses. If you haven't used it yet, give it a try at your earliest opportunity. For IT and finance people alike, it can be an eye-opener. It's free and available online—Mobility Expense Calculator.
Once you have better visibility into your company's true mobility costs, you have the information you need to develop smart cost-containment strategies. For example:
Identify the departments and users that show the largest black budget spend, and move them onto a standardized service that you control and can monitor—ideally implemented with a department charge-back to ensure that heavy users are not being subsidized by light users.
Look at your mobility suppliers around the world and see if there are ways to reduce the number of vendors you work with and increase your buying power by finding a global partner.
Enact policies to move expenditures out of black budgets and into the light of day—such as standardizing how retail purchases of Wi-Fi hotspot, hotel Internet and 3G data access are accounted for—so you can easily analyze spend by department and over time.
Now that you have better understanding and control over the budget, make sure you're getting maximum value from it. Don't pay for idle subscriptions. Don't allow users to buy unauthorized equipment or create unauthorized accounts. Don't waste administrative resources managing multiple vendor accounts. Demand global purchasing power.
By choosing iPass, you've already addressed many of these issues. But here's a little secret: Whenever I talk to our customers, I almost always uncover ways they can get even more value from their iPass services. Here are four of which you may have overlooked:
If you're still on usage-based pricing, you should consider iPass enterprise flat-rate plan. It's the easiest way to cap heavy user spending, minimize idle subscriptions and achieve budget predictability.
How far have you rolled out iPass? If you've kept iPass reserved as a service for frequent travelers, you may have created a black budget problem among other employees. By bringing more users into the fold and incorporating departmental charge-back, you may cut cost while improving visibility.
Consider the full value of vendor consolidation. Are you using iPass for Wi-Fi and dial, but separate mobile operators for 3G mobile data? Are you maintaining separate vendors for mobile and fixed broadband services? You might want to see what iPass' global purchasing power can do. You'll consolidate your number of vendors and receive a single, detailed bill that covers all your remote and mobile usage.
Learn how to use our device management capabilities. The most obvious savings are due to improved productivity and efficiency. However, when I ask customers about systems management licenses they no longer require, or training costs for these obsolete tools, the cost savings are considerably greater. iPass training can pay big dividends in this area.
As iPass' CFO, I know the savings opportunities made possible with our technologies, and I strive to take full advantage of them. We want you to do the same. Let us know about your mobility expense concerns. Contact your iPass Account Manager for more information on how iPass can help you get your mobility budget under control and ensure you're getting the most out of your iPass service.
