Running the ROI numbers on BYOD

With hard data in short supply, the value of consumer devices is in the eye of the beholder.

squeezing money

Are companies getting a good return on investment when employees use their own mobile devices in the workplace? Turns out, the answer is dramatically different depending on whom you ask.

When Computerworld put the question to an array of IT leaders and mobile device experts, there was a striking dichotomy in their responses.

IT leaders are enthusiastic about their bring-your-own-device policies, and while they can't produce hard ROI numbers, they do say that BYOD saves money and increases productivity. Industry watchers aren't so sure, citing costs related to service plans, support and compliance as often-overlooked concerns.

For many IT managers, the most important benefits of BYOD don't manifest in hard numbers, but rather in warm fuzzies from users who value fulfilling work environments, more seamless integration of their work and home lives, and the feeling that they are appreciated.

That's the case at Cisco Sytems, which has had a BYOD program for four years. "Cost is one aspect of it, and we are seeing declining costs," says Sheila Jordan, Cisco's senior vice president of IT collaboration. But the biggest benefit is "the productivity and the value that we are giving to our organization" by, among other things, "fostering collaboration, building employee morale and creating an environment that is attractive to millennials," she says.

Michael L. Capone, corporate vice president and CIO at Automatic Data Processing, has a similar take on the BYOD program ADP launched two years ago. The goal wasn't necessarily to save money but rather to increase employee satisfaction, and he says the program achieved that goal. "The primary benefit is just making the associates feel good about working at ADP," Capone says. "It's been good for morale."

Contrast those rosy comments with this assessment from Nucleus Research, which tracks technology ROI: "The hype behind BYOD is that it is cheaper and drives more productivity than traditional corporate-procured mobility. However, the reality is that the support costs, compliance risks and usage reimbursement typically lead to a higher total cost of ownership with no discernible ROI or productivity gains." Ouch.

Wanted: Hard Numbers

While people are entitled to their own opinions about the qualitative benefits of BYOD, it should be possible to determine some kind of ROI based on the numbers. But data on exact costs is hard to come by. That's because there are a hodgepodge of approaches to BYOD. Some companies let employees use their personal devices but also support some company-owned devices; others have cut the cord entirely, requiring employees who want them to buy their own phones and tablets. Some companies pay for service plans. Others don't. Still others partially reimburse workers.

Costs vary depending on the model, but in general the two major costs in a BYOD program are the service plans and the support, with compliance as another concern, say analysts.

Hyoun Park, an analyst at Nucleus Research, says in 50% to 75% of the BYOD implementations he sees, employers offer some type of reimbursement to the employee for the cost of the service plan. The problem is that often the company pays more in those reimbursements than it would if it were taking advantage of volume discounts and managing those costs internally, Park says.

And even if the employer passes along corporate discounts to employees, it still may not be getting a great deal, says David Schofield, partner at Network Sourcing Advisors, a firm that helps companies evaluate telecommunications service plans and negotiate with providers.

"Companies always think they are getting the best discount there is," he says. "That's usually not true. That's the best discount their account team has seen; it's not the best discount we've ever seen." On the flip side, employees often end up paying out of their own pockets if they exceed their plans' usage limits -- even if they did so for work-related reasons -- and that can be bad for morale.

Hidden Support Costs?

Then come the support costs. Even if the company limits the types of devices it will support to iOS, Android and BlackBerry, there are still multiple versions of those operating systems. "Now you need staff that understands all these operating systems," says Schofield.

And then the next great smartphone, tablet or operating system is always just around the corner. "If we've seen anything in mobility, it's that nobody has a permanent, prominent position," says Park. "So a true BYOD approach means that you've got to learn a completely new platform every couple of years."

So far, support costs haven't been an issue for either Cisco or ADP. At Cisco, Jordan reports that support costs are down. And at ADP, Capone says, "we haven't really seen an uptick. There were lots of predictions of gloom and doom, but we've managed pretty well."

ADP has for years issued corporate BlackBerries and paid for service, but about two years ago it started allowing employees to bring in their own devices. Employees pay for their devices and service plans, while ADP provisions and secures the devices, says Capone. Today, about half of ADP's 9,000 mobile users have chosen to bring their own devices (mostly smartphones) rather than taking a corporate BlackBerry.

Jordan emphasizes that the success of Cisco's BYOD program is mostly due to its broad strategic approach, which includes maintaining a strong wireless infrastructure and supporting social media and other important business applications across the company.

Under Cisco's BYOD plan, which includes 46,000 smartphones and 14,000 tablets, employees buy their own devices. Cisco pays for smartphone service for approved managers, a policy that covers about 63% of the plans. The company doesn't pay for service for tablets.

Without divulging what support costs were four years ago when the program started, Jordan says support costs per user have dropped by 33% over the past two years. She credits a Cisco social support community called IT Mobility Services with reducing those costs. By using that service, which is built on the vendor's own WebEx Social enterprise collaboration platform, employees can provision their own devices in six steps and get other tech support. "That's saved a lot of money," she says. A chat feature is available for users who need to talk with IT, but for the most part, she says, "IT has stepped out of the way."

Reality Check

Positive reports from companies like Cisco and ADP notwithstanding, mobile industry watchers remain unconvinced that BYOD programs save money.

Schofield says he has heard all sorts of ROI statistics from his clients and has poked some significant holes in them. For example, one client boasted that the average number of tickets its help desk had to handle per month had declined from 0.55 per user to 0.44 with the advent of BYOD. But the client didn't account for the fact that the BYOD program had expanded the number of users needing support from 10,000 to 23,000. That means the total number of tickets increased from 5,500 a month to more than 10,000 a month. "What does that do to your help desk?" Schofield asks.

Park adds that compliance can be an additional cost if BYOD programs don't have adequate controls. He cites the example of one organization (which he can't name) that paid more than $500,000 in fines because it couldn't access data on a specific device in response to a subpoena in a sexual harassment suit.

It simply might be too early to assess the real costs and benefits of BYOD, but Park believes that could change this year. "We are at a critical mass where a majority of companies are actually dealing with BYOD," he says, adding that companies are "starting to live the pain of the increased management challenges, the inability to make the tech decisions because nobody is sure what's going to come into the organization next, or actually getting hurt by compliance and security issues that could've been avoided by taking care of mobility in a more mature manner."

Frequent Computerworld contributor Harbert is a Washington, D.C.-based writer specializing in technology, business and public policy.


Copyright © 2013 IDG Communications, Inc.

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