White Paper

Mobile Management Models:
Which Mobile Management Model is Best for My Organization - Company Managed or Individual Fixed Stipend?

As mobile services become an integral part of productivity enhancement, organizations increasingly embrace them for their employees. And as the number of devices increases, so does their cost and the complexity involved in maintaining them. These organizations, grappling with the issue of the structure most suited to manage their mobile services network, have different models to consider:

1. Individual Liable or Stipend Model

Definition

Many organizations offer a flat stipend to their employees towards reimbursement of their mobile service charges. Individuals buy their own services, decide which features to put on their phones, and when to use the phones. The company adds a fixed amount to the employee's pay check as a reimbursement towards mobile spend.

Benefits

• Low accounting and IT overhead

Drawbacks

It might seem simple to let individual employees decide what they want, but in practice it is far from simple and has many drawbacks, such as:

• Not being able to use corporate purchasing power for plans and devices
• No pooling optimization of calling plans, leading to higher costs
• 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 employee call records
• Organization cannot enforce security and usage policies
• Security risk with company call records and contacts on personal devices
• Employees might not use phone for corporate purposes, saving minutes for personal use, thus defeating the aim of providing the mobile phone
• Legitimate users with higher mobile bills would still need to submit their invoices as travel and entertainment expense reports. (Cost of processing an expense report as per industry average is $42.)
• IRS requires that the reimbursement be considered as taxable income to the employees

2. Individual Liable with Corporate Discount

Definition

The organization negotiates discounts with the carrier. Employees then buy the equipment and plans. Invoices are then reimbursed via travel and entertainment expenses or fixed stipend.

Benefits

• Low accounting and IT overhead
• Individuals get a corporate discount on phones and plans

Drawbacks

This Individual Liable with Corporate Discount model inherits the same drawbacks as the Individual Stipend model.

3. Corporate Liable Centralized Model

Definition

In the Corporate Liable Centralized model, the organization provides the device and the calling plans. The devices and calling plans have a corporate discount and the organization owns all the phones. Billing is consolidated and managed centrally, and the company is able to take a full deduction of mobile expenses for tax purposes. The organization can also implement security and usage policies.

Benefits

• Corporate discounts for plans and devices
• Pooling optimization of calling plans leading to lower cost
• Mitigates risks, since all mobile devices and their records belong to the company
• Centralized tracking and management of mobile devices procurement and bill paying, rather than an employee managed travel and entertainment expense item
• Organization owns the numbers, not individual employees
• Organization can enforce security and usage policies
• Complete IRS compliance

Drawbacks

• Perceived as an expensive proposition

Why the Corporate Liable Model is Considered the Best Way to Manage Mobile Services

Advances in technology have produced solutions that substantially reduce the cost of managing mobile services, generate procedural efficiencies, and deliver an overall positive ROI.

These software platforms handle:

• Order/Procurement Management
  The system tracks company-wide changes in the mobile environment. It facilitates new activations with the most suitable rate plans. It provides a procurement process with hierarchical approvals. It centralizes disconnects due to departing employees. It handles equipment returns and reports port overs from one carrier to another. Companies get complete visibility and control from order placement through installation to validation.
  
  
• Invoice Processing, Auditing, & Cost Allocations
  These software platforms process and valildate invoices, fully automating invoice management and charge backs across groups and/or locations. The solution audits invoices against contracts and inventory. Companies can then set allocation rules for cost centers based on a variety of factors including percentage share, revenue, or spend.
  
  
• Contract Management
  The system 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 the end of their term.
• Optimization
  These software programs allow for the optimization of a pool of minutes to best manage the cost of the services, allowing organizations to build scenarios and compare costs.
• Reporting
  The solution provides an extensive array of reports that can be configured to the needs of the individual enterprise. For example, the CFO/CIO would need the overall financial details, whereas the location manager may want to see just his department's spend. All these reports lead 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 enterprise-level organizations.