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Managing Enterprise Wireless Costs Yields Big Savings

Managing Enterprise Wireless Costs Yields Big Savings
December 29, 2009 7:22AM

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Enterprises will overspend on wireless service costs by an average of 15 percent through 2014, according to Gartner. Implementing voice and data management can reduce costs, according to Aberdeen, which said it's not uncommon to find live cell phones tossed in a box. New plans are available and outsourcing management can be worthwhile.

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Are you spending too much on your enterprise wireless service? If you're like most large companies, the answer is an overwhelming yes.

About 80 percent of enterprises will overspend on wireless service costs by an average of 15 percent through 2014, according to Gartner. As mobility has grown among enterprises, Gartner said, costs have also grown. The good news is you can curb wireless costs if you understand contracts, data usage, roaming and mobility management.

"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."

How Much Savings?

How much can you save? The Aberdeen Group reports best-in-class companies can decrease wireless voice and data costs by implementing a wireless enterprise management solution. Best-in-class companies saw data costs drop by 32 percent and voice costs drop by 26 percent, while laggard companies actually saw a 16 percent increase in data charges, according to Aberdeen's 2009 Wireless Expense Report.

About half of companies Aberdeen researched are either using an in-house solution or no solution at all to manage their wireless expenses. Without a program, practical tasks like retrieving smartphones from terminated or transferred employees fall through the cracks. In large companies, it's not uncommon to find a closet full of cell phones that were tossed in a box without thought about the ongoing service contracts, according to Hyoun Park, a research editor in the Aberdeen Group's Technology Markets Group.

"A typical billion-dollar company will end up spending about $5 million a year on wireless costs. In an unmanaged environment, there's probably $1 million to $1.5 million in potential savings available," Park said. "That's money enterprises have been giving up on a regular basis once they hit about the 1,000 cell-phone mark. It's mind-blowing."

Reviewing Wireless Contracts

A major culprit running up costs is ill-fitted wireless contracts. The way enterprises purchase wireless services has changed in the past few years. More than 60 percent of midsize and large companies have moved away from buying individual plans because they are least efficient in terms of cost reduction, according to Gartner. But newer plan types such as pooling, flat-rate and zero-minute phones need to be evaluated carefully to make sure they offer maximum value across the entire organization. (continued...)

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