The proliferation of smart devices and the consequent increased consumption of data has severely strained mobile networks in the US and beyond. The iPhone changed the game as user expectations related to the capabilities of wireless devices shifted dramatically. No longer were phones viewed simply as communications mechanisms. From that point forward they became the hub of all of our professional, personal and social interactions and activities. Wireless users now use their smartphones to view streaming video, participate in video conferencing, listen to internet radio and download and read books. The introduction of Apple’s latest product, the iPad may have crippling effects on AT&T’s already severely strained network. Since late 2006, AT&T has seen a 7000% increase in wireless data usage!
Imagine the effects of 1M iPads consuming 5GB each month- not too difficult to hit or surpass when you look at the numbers. Say I’m stranded at a family function one day in late March and I want to watch a particular NCAA tournament game. No problem; I whip out my trusty iPad and go to town for 2 ½ hours. Unfortunately for those sharing bandwidth, I’ll be sucking down 300MB of data per hour! Ouch. Out on the boat listening to Slacker or Pandora through your iPhone? That will absorb 60MB/hour. You get the picture. Voice calls, emails and text messages now represent a pimple on the buttocks of the data piece. And with smartphone sales expected to grow 30% this year, there are no simple solutions. It is now incumbent upon the carriers to build out their networks to accommodate these changes in behaviors associated with recent technological innovations.
Tuesday, February 16, 2010
Friday, February 12, 2010
RFP
So you are thinking about putting out an RFP for TEM/WEM services. Terrific. Seems easy; as the Global Purchasing Manager, you reach for your standard RFP template, sift through some “independent research” to build and narrow a vendor list and send it out. Sounds easy, right. Or is it? Your standard RFP questions elicit canned responses from the usual players until you grab that one proposal that seems a bit different. This vendor’s answers weren’t really answers at all. In fact, most of your questions were answered with questions. And they didn’t even include a price for service. The nerve! Until you peel the onion back a layer. The vendor includes a note explaining the somewhat abnormal approach he took to filling out your RFP.
The note starts,” Thank you for including us in your RFP. We are sorry we weren’t able to answer most of your questions. Our process works a bit differently than most of our competitors. Without an accurate snapshot of your current state, we really can’t provide meaningful answers to your questions. Like many of our clients before they engaged our services, you really don’t have a handle on your current inventory as procurement is completely decentralized. Many employees have individual liable phones and T&E their bill each month. And there doesn’t appear to be a uniform policy in place. Without a clearer picture of your current state both from an inventory perspective and spend, we don’t feel comfortable quoting our services as we don’t really know what it is that you need. We never attempt to fit a potential customer into our standard boxes. Rather, we like to do an analysis of current state, thereby enabling us or any vendor you select to provide a meaningful quote of services. This service prepares the customer for RFP and ultimately streamlines the implementation process. Our pre-RFP service is charged on a time an materials basis….”
Wow! That was unexpected. But should it be? How can a vendor respond to an RFP when they have no idea the level of service you truly need. Let me restate that: how can a company put out an RFP when they have no idea of what they currently have in inventory, how bills are processed, how policy is developed and communicated and what level of service they need? This lack of knowledge on the side of the client and the flawed process and communication initially leads to many of the delays that often happen during implementation. Why not take a page out of the management consulting handbook and do a diagnostic analysis before making the vendor selection and service level decisions. Makes sense to me.
The note starts,” Thank you for including us in your RFP. We are sorry we weren’t able to answer most of your questions. Our process works a bit differently than most of our competitors. Without an accurate snapshot of your current state, we really can’t provide meaningful answers to your questions. Like many of our clients before they engaged our services, you really don’t have a handle on your current inventory as procurement is completely decentralized. Many employees have individual liable phones and T&E their bill each month. And there doesn’t appear to be a uniform policy in place. Without a clearer picture of your current state both from an inventory perspective and spend, we don’t feel comfortable quoting our services as we don’t really know what it is that you need. We never attempt to fit a potential customer into our standard boxes. Rather, we like to do an analysis of current state, thereby enabling us or any vendor you select to provide a meaningful quote of services. This service prepares the customer for RFP and ultimately streamlines the implementation process. Our pre-RFP service is charged on a time an materials basis….”
Wow! That was unexpected. But should it be? How can a vendor respond to an RFP when they have no idea the level of service you truly need. Let me restate that: how can a company put out an RFP when they have no idea of what they currently have in inventory, how bills are processed, how policy is developed and communicated and what level of service they need? This lack of knowledge on the side of the client and the flawed process and communication initially leads to many of the delays that often happen during implementation. Why not take a page out of the management consulting handbook and do a diagnostic analysis before making the vendor selection and service level decisions. Makes sense to me.
Thursday, February 11, 2010
Wireless as a Priority
During tough economic times, managers, responding to directives from the C-Suite/Board room, typically look to the expense half of the income statement. Top line growth, the more sustainable practice to improve bottom line (costs can’t be cut in perpetuity but revenue can ostensibly grow to the current size of the overall market plus organic growth), is viewed as unrealistic and as such, controlling costs becomes the corporate dictum. In my recent travels, I have heard of 20% across the board cuts mandated by “corporate”. That sort of arbitrary pronouncement seems not only unrealistic but also not very well thought through. Perhaps focusing on areas that are truly wasteful and where an impact can be felt quickly without any material change to performance is a better strategy?
One of the challenges TEM/WEM vendors face during the sales process is the notion by potential clients that telecom really isn’t a priority; that they are looking to achieve significant savings and wireless (in our case) simply doesn’t measure up. Independent research has shown that telecom represents the third largest line item on the expense half of the Income Statement with wireless accounting for a significant and growing percentage of that spend. Yes, there are larger issues and perhaps areas where wastefulness is even more egregious. However, when you compare cost savings opportunities, managers must also consider the time and resources required to implement such changes. That is where IRR comes in.
I am a venture capitalist by trade. VCs are typically measured using two metrics: cash on cash return (our preference) and Internal Rate of Return (IRR), the preference of those that typically evaluate our performance. IRR measures investment and returns over time. The critical thing to understand here is that time is as important in the calculation as is return. Think of it as ROI weighted to reflect the time value of money; money today is worth more than money tomorrow. It is absolutely critical for managers to consider the value of their time when evaluating projects side by side. Implementations of WEM projects typically take 90 days. During that time, the vendor is determining requirements, gathering information, building and reconciling inventory, consolidating accounts, evaluating policy, analyzing bills, configuring reports etc. At the conclusion of those three months, the client should begin to experience the benefits, both economic and execution, of outsourcing to an industry expert. Compare that timeline to that of some of the oft sited initiatives competing for the hearts and minds of managers and there is really no comparison. I am certainly not eschewing the virtues of other cost cutting mechanisms. However, telecom seems to be continually subjugated to other, “larger” initiatives. When put in what I believe to be the proper context, a comprehensive analysis and shift of the telecom environment makes quite a bit of sense.
But it certainly doesn’t end with hard cost savings. It is hard to ignore that the wireless world is changing every day. Competing for a saturated market (in a country of 300M, there are more than 270M cell phones) carriers are shifting their pricing models. We are clearly moving toward a buffet style pricing strategy on the voice side; the all you can eat for $40 strategy. So if the price of plans is static, doesn’t that change the game for WEM provider? Well, the answer is yes and know. Let’s start by clarifying the savings generated by a good WEM vendor. We have discussed hard costs but we really haven’t gone in depth as to the soft cost savings. In the most recent “Voice Report” published by CCMI, the responsible ratio of Devices-to-Staffer is 500-to-1. The same report postulated that outsourcing to a WEM Vendor can move that number to 5,750-to-1! Just think about those numbers. For an organization with 11,500 cell phones, they would require 21 less full-time staffers to manage the wireless environment (from 23 to 2). Even at a modest, fully loaded cost of $50k/employee, that equates to $1,050,000 in employee cost savings. That more than covers the $800,000-$900,000 a WEM vendor might charge that company annually. And an effective WEM partner will identify and curtail employee behavioral issues that impact costs (mobile media, texting, directory assistance etc.) representing another significant savings category.
Beyond savings, outsourcing management of your wireless environment can have a dramatic impact on the organization from a process perspective. A true knowledge expert can employ best practices as it relates to policy, costing, and reporting. I spoke of policy in the prior post so I don’t need to reiterate that argument. Costing can become an issue in large organizations with numerous cost centers, especially when they are already pooling minutes in their wireless plans. For example, I may have a 200 minute plan and Jim is on the 1800 minute plan. Between us, we average about 1900 minutes each month so the numbers work. However, at present, my department is being charged for my 200 minute plan and Jim’s is charged for 1800 minutes. But, if I typically use 1100 minutes and Jim uses 800, does that paint a clear picture of performance? Is that fair? Of course not. Some companies assign costs to centers based upon headcount believing it gives a more accurate portrayal of actual costs. Perhaps but the best methodology is clearly to charge each center based upon actual consumption. A good WEM vendor can do precisely that. When you add custom reporting to the picture, the argument for outsourcing the wireless program is clear.
We are living in difficult economic times. Managers, working with fewer resources, are being asked to analyze key initiatives, departments and processes to find and eliminate waste. I have made the argument in the preceding prose that the wireless environment deserves a seat at the table. I’m convinced….. are you?
One of the challenges TEM/WEM vendors face during the sales process is the notion by potential clients that telecom really isn’t a priority; that they are looking to achieve significant savings and wireless (in our case) simply doesn’t measure up. Independent research has shown that telecom represents the third largest line item on the expense half of the Income Statement with wireless accounting for a significant and growing percentage of that spend. Yes, there are larger issues and perhaps areas where wastefulness is even more egregious. However, when you compare cost savings opportunities, managers must also consider the time and resources required to implement such changes. That is where IRR comes in.
I am a venture capitalist by trade. VCs are typically measured using two metrics: cash on cash return (our preference) and Internal Rate of Return (IRR), the preference of those that typically evaluate our performance. IRR measures investment and returns over time. The critical thing to understand here is that time is as important in the calculation as is return. Think of it as ROI weighted to reflect the time value of money; money today is worth more than money tomorrow. It is absolutely critical for managers to consider the value of their time when evaluating projects side by side. Implementations of WEM projects typically take 90 days. During that time, the vendor is determining requirements, gathering information, building and reconciling inventory, consolidating accounts, evaluating policy, analyzing bills, configuring reports etc. At the conclusion of those three months, the client should begin to experience the benefits, both economic and execution, of outsourcing to an industry expert. Compare that timeline to that of some of the oft sited initiatives competing for the hearts and minds of managers and there is really no comparison. I am certainly not eschewing the virtues of other cost cutting mechanisms. However, telecom seems to be continually subjugated to other, “larger” initiatives. When put in what I believe to be the proper context, a comprehensive analysis and shift of the telecom environment makes quite a bit of sense.
But it certainly doesn’t end with hard cost savings. It is hard to ignore that the wireless world is changing every day. Competing for a saturated market (in a country of 300M, there are more than 270M cell phones) carriers are shifting their pricing models. We are clearly moving toward a buffet style pricing strategy on the voice side; the all you can eat for $40 strategy. So if the price of plans is static, doesn’t that change the game for WEM provider? Well, the answer is yes and know. Let’s start by clarifying the savings generated by a good WEM vendor. We have discussed hard costs but we really haven’t gone in depth as to the soft cost savings. In the most recent “Voice Report” published by CCMI, the responsible ratio of Devices-to-Staffer is 500-to-1. The same report postulated that outsourcing to a WEM Vendor can move that number to 5,750-to-1! Just think about those numbers. For an organization with 11,500 cell phones, they would require 21 less full-time staffers to manage the wireless environment (from 23 to 2). Even at a modest, fully loaded cost of $50k/employee, that equates to $1,050,000 in employee cost savings. That more than covers the $800,000-$900,000 a WEM vendor might charge that company annually. And an effective WEM partner will identify and curtail employee behavioral issues that impact costs (mobile media, texting, directory assistance etc.) representing another significant savings category.
Beyond savings, outsourcing management of your wireless environment can have a dramatic impact on the organization from a process perspective. A true knowledge expert can employ best practices as it relates to policy, costing, and reporting. I spoke of policy in the prior post so I don’t need to reiterate that argument. Costing can become an issue in large organizations with numerous cost centers, especially when they are already pooling minutes in their wireless plans. For example, I may have a 200 minute plan and Jim is on the 1800 minute plan. Between us, we average about 1900 minutes each month so the numbers work. However, at present, my department is being charged for my 200 minute plan and Jim’s is charged for 1800 minutes. But, if I typically use 1100 minutes and Jim uses 800, does that paint a clear picture of performance? Is that fair? Of course not. Some companies assign costs to centers based upon headcount believing it gives a more accurate portrayal of actual costs. Perhaps but the best methodology is clearly to charge each center based upon actual consumption. A good WEM vendor can do precisely that. When you add custom reporting to the picture, the argument for outsourcing the wireless program is clear.
We are living in difficult economic times. Managers, working with fewer resources, are being asked to analyze key initiatives, departments and processes to find and eliminate waste. I have made the argument in the preceding prose that the wireless environment deserves a seat at the table. I’m convinced….. are you?
Wednesday, February 10, 2010
Policy Development vs. Policy Enforcement
Corporations by their very nature are political organisms. And as such, much like their siblings, government entities, they require policy to regulate and incentivize behavior. All corporations should commit to building a thoughtful and comprehensive policy to guide employee behavior related to wireless devices. As I mentioned in the prior post, today’s cell phones are as powerful and versatile as many laptops were only a few years ago. Users, if left to their own devices, have access to expensive downloads, streaming video, television, music and unfettered access to the internet, including illicit sites. Not only can this behavior cost the corporation thousands of dollars in the short term but it can also cost millions later through lawsuits and fines. A well constructed and communicated wireless policy can help to allay the fears in the board room as employees are less likely break policy if they know that there is in fact a policy and understand its basic components.
But, solid policy alone falls short without equally diligent policy enforcement. How so, you ask? Let’s take a fairly common and benign example. Several times each year, a new and exciting device comes out, replete with an updated OS, sophisticated styling, upgraded hardware/software and the media hype and consumer buzz that logically follows. The most recent example would be the Google Android-based phones by HTC, Motorola et al. Before that it was the Blackberry Tour. Before that it was the Palm Pre/Pixi. Before that, it was the BB Storm. You get the idea. Game changing technology or not, the associated buzz creates demand in the wireless users community. We have seen time and again a dramatic uptick of phones being damaged, stolen, lost etc coinciding with the release of the latest and greatest smart phone. Even though your workhorse Blackberry Tour is still at the top of its game, your desire for the new Droid has you marching into your manager’s office requesting the upgrade. “It’s buggy” you exclaim. “I’ll have more luck with the Droid” you conclude. Here is where policy and policy enforcement can and often do, deviate from one another. Let’s say that corporate policy is to upgrade phones every 18 months. But when did you last upgrade you device? Who’s keeping track? If they were keeping track they would see that you have had 4 upgrades in the last 18 months, each coinciding with the release of a “game changing device”. Without the mechanisms in place to measure behavior against policy, an organization has very little chance to enforce policy. Lack of enforcement renders policy impotent. So, if policy alone serves little purpose and enforcement is virtually impossible without the proper mechanisms in place to measure, what are those mechanisms and how do I get them?
Wireless Expense Management companies like Cellution, work with organizations to take charge of their wireless environment, empowering wireless users, mitigating risk and putting teeth to wireless policy. Cellution’s proprietary software known as BillSMART tracks every minute of talk time, every kb of data, every upgrade or accessory request, every mobile media or ringtone download etc. Our clients know precisely when an employee last upgraded their phone. They know which users average 500 texts each month, 10 calls to 411 and 5 application downloads. Some of our clients are able to curtail that behavior in real time by leveraging our Mobile-I real time product. So, there are mechanisms out there, in the case of Mobile-I, off the shelf products that arm companies with the information to put teeth to their wireless policy. So the next time an employee asks for the latest and greatest, you will have the appropriate information at hand to make the appropriate decision.
Other examples of employee abuse of wireless devices can have far more dire consequences for the corporation. Examples of such behavior might be frequenting illicit web sites, downloading and disseminating trade secrets and texting while driving. Lawsuits resulting from any of these activities would certainly be directed at the corporation owning the phone and not the employee participating in the behavior. For example, in 2005 Beers Skanska paid $4.75M to settle a lawsuit when one of its employees crashed into a stationary car while reaching to retrieve a message from a mounted, hands-free cell phone. A policy prohibiting such behavior is a start but putting into place the appropriate mechanisms to actually shift employee behavior is critical to the wellbeing of the organization. Cellution can partner with your organization to create your policy, measure behavior against said policy and, using proprietary software components and a world class team, shift behavior to achieve compliance.
But, solid policy alone falls short without equally diligent policy enforcement. How so, you ask? Let’s take a fairly common and benign example. Several times each year, a new and exciting device comes out, replete with an updated OS, sophisticated styling, upgraded hardware/software and the media hype and consumer buzz that logically follows. The most recent example would be the Google Android-based phones by HTC, Motorola et al. Before that it was the Blackberry Tour. Before that it was the Palm Pre/Pixi. Before that, it was the BB Storm. You get the idea. Game changing technology or not, the associated buzz creates demand in the wireless users community. We have seen time and again a dramatic uptick of phones being damaged, stolen, lost etc coinciding with the release of the latest and greatest smart phone. Even though your workhorse Blackberry Tour is still at the top of its game, your desire for the new Droid has you marching into your manager’s office requesting the upgrade. “It’s buggy” you exclaim. “I’ll have more luck with the Droid” you conclude. Here is where policy and policy enforcement can and often do, deviate from one another. Let’s say that corporate policy is to upgrade phones every 18 months. But when did you last upgrade you device? Who’s keeping track? If they were keeping track they would see that you have had 4 upgrades in the last 18 months, each coinciding with the release of a “game changing device”. Without the mechanisms in place to measure behavior against policy, an organization has very little chance to enforce policy. Lack of enforcement renders policy impotent. So, if policy alone serves little purpose and enforcement is virtually impossible without the proper mechanisms in place to measure, what are those mechanisms and how do I get them?
Wireless Expense Management companies like Cellution, work with organizations to take charge of their wireless environment, empowering wireless users, mitigating risk and putting teeth to wireless policy. Cellution’s proprietary software known as BillSMART tracks every minute of talk time, every kb of data, every upgrade or accessory request, every mobile media or ringtone download etc. Our clients know precisely when an employee last upgraded their phone. They know which users average 500 texts each month, 10 calls to 411 and 5 application downloads. Some of our clients are able to curtail that behavior in real time by leveraging our Mobile-I real time product. So, there are mechanisms out there, in the case of Mobile-I, off the shelf products that arm companies with the information to put teeth to their wireless policy. So the next time an employee asks for the latest and greatest, you will have the appropriate information at hand to make the appropriate decision.
Other examples of employee abuse of wireless devices can have far more dire consequences for the corporation. Examples of such behavior might be frequenting illicit web sites, downloading and disseminating trade secrets and texting while driving. Lawsuits resulting from any of these activities would certainly be directed at the corporation owning the phone and not the employee participating in the behavior. For example, in 2005 Beers Skanska paid $4.75M to settle a lawsuit when one of its employees crashed into a stationary car while reaching to retrieve a message from a mounted, hands-free cell phone. A policy prohibiting such behavior is a start but putting into place the appropriate mechanisms to actually shift employee behavior is critical to the wellbeing of the organization. Cellution can partner with your organization to create your policy, measure behavior against said policy and, using proprietary software components and a world class team, shift behavior to achieve compliance.
Tuesday, February 9, 2010
Making the Case for Wireless Telecom Expense Management
Wireless Telecom Expense Management (WEM). Raise your hand if you know what precisely that is. Well, if you are in the C-Suite of a medium or large organization, you should familiarize yourself with the topic. As they have grown in functionality, wireless devices have more and more become our lifelines. Countless studies have shown them to be effective drivers of incremental productivity as today’s Blackberry and iPhone are as powerful as was your laptop six years ago. You simply can’t afford to not arm your management and sales staffs with robust wireless devices. Gone are the days where we can simply return a call or email upon our return to the office. We live in a real-time world. Those that don’t keep up will be left in the dust of the pace setters.
So, we’ve made the case for robust wireless devices in the workforce but how do companies support and manage said devices? And how can they ensure that they are not overspending? Well, according to a recent study conducted by Gartner, they almost certainly are. Gartner’s report indicates that 80% of enterprises are overspending by an average of 15% and will continue to do so through at least 2014! Where does that number come from, you ask? Well, the “breakage” is comprised of several factors including: inefficient rate plan usage, overcharging by the carriers, lack of a defined corporate policy and lack of enforcement of said policy. And the Gartner number doesn’t begin to account for the “soft” costs associated with managing the wireless program with internal resources. If you are in the construction business, wouldn’t you rather have your PMs and accountants focusing on core initiatives rather than pouring through countless cell phone bills assigning costs to six concurrent jobs? That process is terribly inefficient devouring precious time and resources. So, what is the Cellution, you ask? A Wireless Telecom Expense Management solution, of course.
Cellution is in the business of saving our customers money, real money, on their wireless spend. Every quarter, wireless is consuming a larger portion of the third biggest line item on the expense portion of the P&L, Telecom. We work with our customers to reduce their spend by an average of 30% while providing dramatically increased visibility. No longer do they have to commit internal resources to maintaining their wireless program. Cellution can come in 2-4 times each year, do an audit and recover over charges and place the customer on the correct plans. Or, should the customer choose to have Cellution manage their entire wireless program, we can handle procurement, reporting, bill reconciliation, contract negotiation, defining corporate policy, help desk and everything else associated with wireless. You outsource your call center, payroll and other non-core business processes, why not outsource your wireless?
So, we’ve done it. We’ve made the case for engaging a WEM provider like Cellution to at least examine your current state. Our Savings Assessment program is a very logical starting point as we are only compensated if we are able to save you money. If we aren’t able to save you money, we are not compensated. It’s simple, risk-free and smart.
So, we’ve made the case for robust wireless devices in the workforce but how do companies support and manage said devices? And how can they ensure that they are not overspending? Well, according to a recent study conducted by Gartner, they almost certainly are. Gartner’s report indicates that 80% of enterprises are overspending by an average of 15% and will continue to do so through at least 2014! Where does that number come from, you ask? Well, the “breakage” is comprised of several factors including: inefficient rate plan usage, overcharging by the carriers, lack of a defined corporate policy and lack of enforcement of said policy. And the Gartner number doesn’t begin to account for the “soft” costs associated with managing the wireless program with internal resources. If you are in the construction business, wouldn’t you rather have your PMs and accountants focusing on core initiatives rather than pouring through countless cell phone bills assigning costs to six concurrent jobs? That process is terribly inefficient devouring precious time and resources. So, what is the Cellution, you ask? A Wireless Telecom Expense Management solution, of course.
Cellution is in the business of saving our customers money, real money, on their wireless spend. Every quarter, wireless is consuming a larger portion of the third biggest line item on the expense portion of the P&L, Telecom. We work with our customers to reduce their spend by an average of 30% while providing dramatically increased visibility. No longer do they have to commit internal resources to maintaining their wireless program. Cellution can come in 2-4 times each year, do an audit and recover over charges and place the customer on the correct plans. Or, should the customer choose to have Cellution manage their entire wireless program, we can handle procurement, reporting, bill reconciliation, contract negotiation, defining corporate policy, help desk and everything else associated with wireless. You outsource your call center, payroll and other non-core business processes, why not outsource your wireless?
So, we’ve done it. We’ve made the case for engaging a WEM provider like Cellution to at least examine your current state. Our Savings Assessment program is a very logical starting point as we are only compensated if we are able to save you money. If we aren’t able to save you money, we are not compensated. It’s simple, risk-free and smart.
Subscribe to:
Posts (Atom)