Where's the BYOD Payoff?

Companies may be bleeding corporate dollars in the name of BYOD productivity gains that don't really exist, says Nucleus Research.

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Wed, April 24, 2013

CIO — Companies jumping on the bumpy "Bring Your Own Device" bandwagon might be the real losers. That is, corporate dollars are falling out of their pockets. A new report from Nucleus Research takes a close look at BYOD costs and finds that companies are financing the trend with little in return.

"The hard ROI of BYOD is a straightforward accounting exercise that is being confused by the feel-good claims around productivity and vendor proclamations that lack a financial foundation," writes Hyoun Park, principal analyst at Nucleus and author of the report.

BYOD, of course, was supposed to save companies money. Let's start with its popular premise: Companies no longer have to buy corporate smartphones and tablets. But this is flawed logic, because the cost of devices themselves make up less than 10 percent of a company's annual mobility spend, says Park.

Consider that an enterprise mobile phone costs $200 per device and has an average lifespan of 18 months, at which point an employee asks for an upgrade. This works out to around $11 per month. Tack on additional 20 to 30 percent savings for volume discounts and free backup devices. This means that companies offloading the device cost to employees are saving only $8 per month under BYOD.

Here's the kicker: BYOD increases the other 90 percent of the mobility spend, which includes voice and data, help desk, developers and mobile management software.

BYOD's Big Spend

A typical business user will spend $80 to $90 per month for a personal smartphone voice and data plan, which the company usually reimburses. The careful reader will notice that this is ten times the cost of the device itself. In comparison, a corporate-owned smartphone costs around $60 to $65 per month, thanks to bulk discounts, pooled data for voice and data and texting, and special rates for international reporting, according to Nucleus.

The BYOD premium doesn't stop there, either. There is a hidden cost to process expense reporting and reimbursement, which works out to around $20. (For more on this, check out BYOD: If You Think You're Saving Money, Think Again.)

"In general, any reimbursement above $40 per month means that the company is deliberately giving up money to support BYOD," says Park, adding, "Companies providing a standard $75 reimbursement (or more) through an expense report process are giving up hundreds of dollars per employee every year to support BYOD."

Unintended Consequences

In its BYOD report, Nucleus cites a startling legal case that took place some six months ago: Massachusetts Eye and Ear Infirmary and Massachusetts Eye and Ear Associates settled with the U.S. Department of Health and Human Services for $1.5 million. What happened? Violations of the HIPAA (Health Insurance Portability and Accountability Act) regulation due to the loss of a personal laptop with identifiable health information.

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