Gartner Says 80 Percent of Enterprises Will Overspend on Their Wireless Service Costs Through 2014

Gartner Outlines Four Areas of Focus to Better Manage Enterprise Wireless Costs
STAMFORD, Conn., July 22, 2009 —

Eighty percent of enterprises will overspend on their wireless service costs by an average of 15 percent through 2014, according to Gartner, Inc. Gartner analysts said that as mobility has grown among enterprises, costs have also grown, and companies need to become better at managing their mobile voice and data costs.

“Our research shows that the majority of companies are not adequately managing their mobile users or services,” said Phil Redman, research vice president at Gartner. “They need to look more closely at their key user segments and requirements in order to match those needs with the right services and optimize their spending.”

Mr. Redman said that during the next year, companies should look to four main areas to manage their wireless costs:

Contracts
How enterprises buy services has changed in the past few years and more than 60 percent of midsize and large companies have moved away from buying individual plans, which are the least efficient in reducing costs. However, newer services, such as pooling plans, flat-rate plans, and zero–minute phones all need to be carefully evaluated to ensure that they are offering maximum value across the organization. Gartner also advises companies to move from individual liability plans (where the user is responsible for the payment and contract) to corporate liability plans that allow for better control of costs through the optimization of wireless services and corporate discounting.

International Roaming
International roaming costs become increasingly difficult to manage as companies extend international travel. Through 2010, 10 percent of users that travel internationally will make up 35 percent of the total service costs for companies that support travel. Although there are no "magic" solutions for reducing costs beyond reducing the number of users who travel, reducing the minutes used and making users aware of the costs, companies can negotiate with the carrier for roaming cost reductions and look to adopt mobile roaming plans. International data roaming can be even more costly with some bills reaching thousands of dollars in a short period. Gartner recommends that companies disallow all ad hoc use of international wireless data and instead promote the use of smartphones for e-mail or ask carriers for bundles for remote workers.

Mobility Management
Active management practices are important to organize services and control expenses. According to Gartner, the two main areas to focus on in management are policy — used to eliminate undesirable practices and promote a set or desirable practices and compliance across the organization — and the use of outsourced services, called telecom expense management (TEM), which provides extensive mobility management services to enterprises.

Desktop Replacement
Some companies are already beginning to integrate their cellular phones into their corporate system, which can support cost routing for reduced service calls or the elimination of desk phones. Both are part of fixed mobile convergence (FMC) plans, FMC being the intersection of where fixed and mobile unified communications (UC) meet and share services and functionality. In this scenario, instead of literally being "chained" to their desk, users will have the freedom of conducting business in a mobile environment but maintain enterprise functionality in the wireless device.