Cell Mobility

Cell phones have changed the way that businesses do business since they first arrived in South Africa about 15 years ago.

The mobility factor has been embraced by some companies to a far greater degree than just being able to answer calls at anywhere and anytime. Other compelling features include vehicle tracking, systems monitoring on production lines, SMS confirmation alerts for internet banking transactions, the ability to integrate your office PC to a cell phone to access company data; and handheld delivery note processing via GPRS. Those services and the even greater range of applications in devices like the Blackberry have changed the way we do business forever.

Executives and managers quickly recognised the benefit of their employees and management teams being able to make and receive calls on the move. Providing 24 x 7 x 365 support to customers and increasing the efficiency of business processes is highly attractive to management.

Despite the obvious benefits that cell phones bring to businesses, the cost implications are significant --and it can be quite difficult to place a value on the return on investment that mobility offers. In my experience, the cost of cell phone use in South Africa and the inability to manage these costs effectively is having a negative impact on the adoption of mobility as a “must have.”

Take a look at how service providers earn their revenue from the GSM networks and how this affects their ability to deliver quality service to you, the customer.

Service providers are paid a margin [roughly 26%] to sell you a network’s services. Out of this margin the service provider must put in place the sales staff and all the operational and financial resources needed to manage their business.

In a bid to reduce their costs, corporate clients buy cell phones from their service provider and demand discount structures, instead of demanding high levels of service and the tools to help them manage their costs.

To make matters worse many companies use multiple service providers on a national basis, so neither the customer nor the SPs have a single view of the company’s total cell phone spend, and no way for one SP to manage all the costs.

Then the company requests a discount in return for their substantial monthly business, and the SP can end up with less than a 10% margin from some clients. Yet the corporation will still expect a top dollar service for bottom dollar payment.

Sales teams are rewarded for new sales they bring in, and therefore the attention they pay to retaining a client is often negligible or non-existent.

Into that mix you can add the constant drive to maximise profits for shareholders, the lack of skills in the marketplace and the general cost of doing business. By now you start to understanding why there is no incentive to inform customers on how best to manage their cell phone costs [ie. spend less money] and more importantly, probably no understanding on where to start.

Companies that adopt cell phones as a crucial business tool can chose one of many paths, or a combination. They can:

· Expect the employee to carry the burden alone
· Share the burden with the employee
· Use GSM Fixed Cellular call back from cell phones to stay in contact with the office
· Limited the use of company-owned phones to the top tier employees
· Put in place credit limits
· Roll out mobility across the board and carry all the costs

Without the necessary skills or insight to assess and manage these options themselves, the business is bound to get frustrated or have limited success in the balancing act between costs and benefits.

However, one of the more serious mistakes made by companies facing increasing cell phone costs is to hand the task of managing the cost over to the employee. The employee is given a credit limit and any additional costs are deducted from their wage. Even worse, many companies have transferred cell phones into the name of the employee, generating many unwanted consequences.

The risks here include losing the cell phone number when the employee leaves, so customers now phone the opposition; not being able to claim the VAT expense anymore, having to ask employees to spend company time getting reimbursed for company costs each month; friction if the employee feels it is costing him to work for you; and resentment from employees who have to let you integrate their private phone into your business processes

So what options does a business in SA have to manage these costs and reap the much-wanted benefits of 24x7x365 connectivity for employees?

These are some of the options available to your business:

• Ignore the benefits, and limit company cell phones to upper management
• Reimburse employees for calls made from their private cell phones
• Pass the costs onto the employees and insist that they have their own phones as part of the job description
• Go the split billing route, where you pay the subscription and the employee pays the call fees
• Employ someone to manage the costs for you or hand it over to an existing employee
• Ensure that you get cost management [read optimisation of cell phone packages and 3G cards] written into your SLA with your existing service providers
• Make use of the various management tools available from service providers
• Outsource the whole management headache to a company like DataRoom

As with every business decision there are pros and cons behind each option. In my experience, businesses are already under enough pressure and managing cell phones requires more than just people. It requires systems, software, knowledge, and good relationships with all the service providers to access their data and intelligent reporting engines.

You need to establish which solution best suits your specific business needs. And most importantly, you should be calling in an expert to advise you on your options.

To understand the opportunity for improving your business efficiencies and be able to weigh that against the costs, you need to be able to measure the consumption ….

And that is where DataRoom’s expertise comes in.

Peter Walsh

Thursday, October 23, 2008
www.dataroom.co.za