Does BYOD cost too much?

Are you saving money with BYOD smartphones?

It's a good bet you don't know how much your company is spending on all those bring-your-own-device smartphones and tablets. Even worse, it's probably too much, says a mobility management expert.

Are you saving money with BYOD smartphones?

The question has many CIOs stumped. Tech analysts, too, have taken opposing views, with one firm predicting hidden costs will derail BYOD this year. Companies such as VMware claim millions in BYOD savings, while mobile consultants and management vendors describe alarming losses.

"It's the moving target of mobility budgets," says CEO Bzur Haun of Visage Mobile, a US-based software-as-a-service provider shedding light on employee-paid and company-paid mobile expenses.

There's no question that BYOD is changing the face of IT. A new report from Forrester found that at least a quarter of a billion global information workers already practice BYOD in some form. Echoing Forrester's report, a recent Cisco survey found that nine out of 10 IT departments enable BYOD in some form.

The shift from company-owned smartphones to BYOD, where employees often own the mobile devices and receive a monthly stipend to cover business-related costs, has made it difficult to track mobile spend-once the sole purview of the CIO.

According to a MobileIron-iPass joint study, a little less than half of IT departments managed the mobile budget in 2012, down from 53 percent in 2011.

Today, Visage Mobile and travel expense management software vendor Concur unveiled a new feature that helps companies get a better handle on an employee's mobile expenses. The feature basically automates expense reporting into Visage Mobile's mobile expense management system.

CIO.com sat down with Visage Mobile's Haun to get his views on the difficulty of corralling enterprise mobility costs, especially in BYOD scenarios.

Aberdeen Group believes many companies are losing money with BYOD. Are you seeing this, too?

My position is that BYOD is a bit elastic.

A lot of people pushed to have BYOD but are just now starting to understand the expense involved, as well as how much leverage gets lost.

Enterprises have a large amount of mobility spend in the CIO organization, but it's migrating to finance and other departments. Consequently, it's difficult to understand exactly how much you're spending.

With our model, you have the ability to see all aspects of mobility spend, including those that are charged back by employees and potentially submitted via expense reports.

When you provided visibility into the spend, what were some of the revelations?

We see shocking things.

During the Haiti earthquake a couple of years ago, we watched an admin at a company spend US$3,000 in Haiti relief on the company dime via text message. You might recall American Red Cross saying that if you enter 9099 on your cell phone, it'll send a $10 donation in charitable giving via your cell bill. In the case of the admin, the employee paid for the device and the company paid the bill. The admin sent 300 messages.

People are carrying three, four or five different devices when the policy states they can carry one or possibly two.

Infographic: BYOD's Dirty Little Secret

We see unbelievable overages in messaging and outrageous data consumption. Eleven percent of the download spend in the enterprise is adult content. That could be anything from Misty Mobile love alerts to sexycougars.com. Companies are spending an average, additional 29 cents per cellular line on 411 calls today. One user had $110 on 411 calls in a single month.

Many companies with a BYOD smartphone policy offer a monthly stipend, with the amount varying depending on the employee's role. This caps the risk of outrageous bills, right?

The stipend is a bit of a blunt instrument.

An enterprise will put in a blanket allowance, say, everyone gets $75. If you look at the roles and functions where $75 is actually appropriate, the [number of employees] is pretty small. If you have a single stipend and draw a line in the sand, you're likely under motivating a number of employees while over motivating others.

And you've lost a lot of visibility in how these devices are being used.

The issue here is, who picked $75? What did they do to design that program? Was it based on the way they use mobility? The point we're trying to make is that the stipend hits very few people exactly on the head, in terms of their functional requirements.

VMware claims to be saving $2 million a year with a BYOD smartphone mandate. The CIO told me that it would be cost-prohibitive to take a hybrid approach: BYOD smartphones mixed with company-owned smartphones. Is the mandate the way to go?

First thing I'd ask, did they have all the data to set that baseline of $2 million in savings? They're probably operating off a baseline that wasn't comprehensive to begin with.

In terms of BYOD mandates, we don't see our customers saying everyone has to buy their own phone. If they did, you'd find exceptions that pop up. There are executive teams and sales assets that you don't want to give up control. Who owns the phone number? What happens when a salesperson leaves?

You provide visibility into BYOD smartphones. Do you run into employee privacy issues?

No, we don't. There is precedence in the marketplace where people are giving a company access to billing information. A common expense reporting scenario: here's my hotel bill but the gift shop expense is personal.

The other thing to understand is, what we present is summary-level information at a category or plan-and-feature level. So we basically say, your voice was this amount, your data this amount.

Nucleus Research predicts BYOD will get a reality check this year due to hidden costs. Do you think high costs will derail BYOD?

I think that there's a lot of ebb and flow.

There's a report we provide to companies that show you how much spend you have in employee-paid mobility and company-paid mobility, side by side. Companies can watch that spend move from bucket to bucket every month.

We're trying to provide an arena where people can see how this spend happens, how it behaves. We think that once this visibility is available in the marketplace, [companies] are going to come back and say, yeah, we should pay for voice and data but not some of these other things.

I do believe that BYOD as a trend and as a consuming topic between finance and IT is here to stay. Right now, I can't say that I see it slowing down. We do watch companies try it one way that may not work, so they approach it from another direction. We run into more companies that say, we tried BYOD and are going to make a little modification.

When we say BYOD, there are about 30 to 40 definitions. There's a wide variety of scenarios. We monitor 21 verticals and don't see a consistent implementation. It's something we'll be continually watching normalize for quite some time.

Tom Kaneshige covers Apple, BYOD and Consumerization of IT for CIO.com. Follow Tom on Twitter @kaneshige. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn. Email Tom at tkaneshige@cio.com.

Read more about byod in CIO's BYOD Drilldown.

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