BYOD: If You Think You're Saving Money, Think Again

Mobile BYOD will cost you about 33 percent more than a company-owned mobile device approach, says Aberdeen Group. Here are five hidden costs.

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Wed, April 04, 2012

CIO — It's the battle hymn of the mobile worker: They want to use their personal iPhones, iPads and Android devices instead of company-issued BlackBerry smartphones and PlayBooks to get their jobs done. It's part of a growing trend called BYOD, or bring-your-own-device.

While CIOs might gloat at BYOD's perceived cost savings—no more BlackBerry purchases!—they'd be wrong to do so. Aberdeen Group found that a company with 1,000 mobile devices spends an extra $170,000 per year, on average, when they use a BYOD approach.

"Organizations that simply say BYOD is about productivity and have completely ignored the cost structure are playing with a blank check," says Aberdeen analyst Hyoun Park.

This is a splash of cold water on the hot BYOD trend.

Mobile BYOD was supposed to get CIOs out of the vicious hardware-buying cycle, or at least offset costs.

Case-in-point: Cisco's cost savings from BYOD is in the neighborhood of 17 percent to 22 percent. "We don't pay for it, and our users are happier," Lance Perry, Cisco's vice president of IT, customer strategy and success, told attendees at the Consumerization of IT in the Enterprise Conference and Expo in San Francisco last month. "Isn't that a beautiful thing?"

But Cisco is the exception, not the rule. BYOD's dirty little secret is that most CIOs aren't seeing cost savings. In fact, mobile BYOD often costs more in the long run than company-owned mobile devices.

So where's the money going? Here are five hidden costs in mobile BYOD.

Hidden Cost: The Monthly Premium Hit

Traditionally, CIOs haven't had much to do with mobile devices. But mobile devices have become strategic lately and thus have fallen into the CIO's purview. This means many CIOs are probably not familiar with a wireless expense management cost structure, which is extremely complicated.

"They approach BYOD from a limited perspective," Park says.

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A company can purchase hundreds or thousands of smartphones and receive a volume-discount rate, including some free replacements. Under a BYOD program, a company doesn't get these benefits. However, this isn't a big deal since employees are paying out of pocket for the hardware anyway.

The problem really comes into play with the wireless service. A company that chooses to own mobile devices can buy services in bulk from a single carrier and increase its discounting power, whereas a consumer signing up for a two-year plan pays a much higher rate.

Aberdeen's research shows that a company seizing a volume-discount rate and optimizing plans for certain employees spends an average of $60-per-month for a smartphone's wireless voice and data services. Whereas the average BYOD reimbursement for a smartphone is $70-per-month.

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