As mobile services are becoming an integral part of productivity enhancement, organizations of all sizes are embracing them for their employees. And as the number of devices increase, so does the complexity involved in maintaining them and their cost. These organizations, grappling with the issue of what is the right structure to manage their mobile services network, have different models to consider:
1. Individual Liable or Stipend Model
Many organizations are offering a flat stipend to their employees towards reimbursement of their mobile service charges.Benefits:
This model has the lowest accounting & IT overhead. Individuals buy their own services; decide which feature to put on their phone and when to use the mobile phone. The company would add a fixed amount to the employees pay check as a reimbursement towards mobile spend.
Drawbacks:
It might seem simple to let individual employees decide what they want, but it is far from that.
- Missing corporate purchasing power for plans & devices
- No pooling optimization of calling plans-- leading to higher cost
- Since employees own the phone, if they leave the organization, they can possibly take away all the clients
- Company can no longer have compliance on the employee call records
- Organization cannot enforce security & usage policies
- Security risk with company call records & contacts on personal device
- Employees might not use phone for corporate purposes saving minutes for personal use defeating the aim of providing the mobile phone.
- Legitimate users with higher mobile bill would still need to submit their invoice by T&E reports (Travel & Entertainment). Average cost of processing an expense report is $42
- IRS wants that the reimbursement be considered as taxable income to the employees
2. Individual Liable with Corporate Discount
The organization negotiates discounts with the carrier. Employees then buy the equipment and plans. Invoices are then reimbursed via T&E expenses or fixed stipend.Benefits:
It has the benefits of the Stipend model plus individuals get corporate discount on the phone devices & calling plans.
Drawbacks:
The model inherits same drawbacks as Stipend model
3. Corporate liable Centralized model
The organization provides the device and the calling plans. The devices and calling plan have a corporate discount and all the phones are owned by the organization. The consolidated billing is managed centrally and the company is able to take a full deduction of mobile expenses for tax purposes. Organization can also implement security & usage policies.The Corporate Liable model is considered as the best way to manage mobile services.
Benefits:
- Corporate discounts for plans & devices
- Pooling optimization of calling plans leading to lower cost
- Mitigates risks: Wireless devices & its records belong to the company.
- Asset Management: Enterprise can track wireless as centralized procurement devices & bill payment. Not employee managed expense item T&E
- Number ownership: Organization owns the numbers-- not individual employees
- Organization can enforce security & usage policies
- Complete IRS compliance
Drawbacks:
This model is perceived as an expensive proposition.
With advancement in technology, now there are solutions which can substantially reduce the cost to manage mobile services in an organization as well as make it easy to handle.
These platforms handle the functions of:
- Order/Procurement Management
The system tracks all the changes in the mobile environment at an enterprise, orders new activations with right rate plans; disconnects departing employees; handles equipment returns and reporting port over from one carrier to another. Companies get complete visibility and control from order placement to installation to validation. - Invoice Processing & Cost Allocations
The invoices are processed and validated and fully automates the invoice management and charge back across groups/locations within an enterprise. Companies can then set allocation rules for cost centers based on variety of factors including percentage share or revenue/spend. - Auditing & Contract Management
The invoices are audited for accurate validation of charges for usage and equipment. It provides tools for managing and ensuring compliance with multiple carrier contracts. It tracks monthly spend to correlate commitment levels. The organization also automatically gets renewal notification for the contracts near end of term. - Optimization
This system allows for the optimization of a pool of minutes to best manage the cost of the services so that organization can build scenarios and compare costs. - Reporting
An extensive array of reports are available and which can be configured to the needs of an enterprise. The CFO/CIO would need the overall financial details where as the location manager may want to see his department spend- all leading to enhanced operational efficiencies. Reporting can be done for chargeback accounting, location breakup charges, employee cellular equipment types, plan types, pooling optimization services and more.
Organizations can streamline their mobile services environment and reduce operational expenses when they chose the Corporate Liable Centralized model.
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Pankaj Gupta (PJ) is the founder of Amtel (www.amtelnet.com) which specializes in cost management of mobile resources and improving productivity at enterprises.