BYOD: You’re Doing it Wrong

Companies can’t reap the full benefits of a bring-your-own-device policy for employees if they reimburse monthly voice and data charges. But the be...
Taylor ProvostMay 15, 2013

It wasn’t all that long ago that the trend known as BYOD (bring-your-own-device) hit the business world by storm, as vendors and customers alike touted its perceived benefits. Those included lowered spending for capital equipment and an increase in productivity from allowing employees to use technology they’re familiar with. Meanwhile, potential risks (primarily surrounding data security) were downplayed.

But at a time when BYOD policies have taken shape in many enterprises, a recent research report has found that being able to use one’s own device might not make employees much more productive after all. And few companies surveyed have seen a positive return on investment from BYOD policies.

According to a new report by Nucleus Research, BYOD proponents may exaggerate the potential capex savings on device procurement and opex gains from lower support requirements. Device costs typically make up less than 10 percent of a company’s annual mobility spend, according to the report’s author, Hyoun Park, principal analyst at Nucleus. The other 90 percent goes for voice and data charges, support costs, developer costs and management software – all of which BOYD can actually serve to increase.

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Of the 20 companies Park interviewed for the qualitative study, only two had achieved a positive ROI from adopting a BYOD policy, and they did so by refusing to reimburse employees for using their personal data and voice plans for business purposes. “That’s honestly not something that will work in a lot of organizations, although it’s the right way to do it from the CFO perspective,” he says.

Companies that want to reap potential productivity increases associated with BYOD have another option. Subramanian Gopalaratnam, head of innovation and chief Asia-Pacific technology officer at procurement-services and back-office outsourcing firm Xchanging PLC, found that many of their customers weren’t reaping cost benefits from a new BYOD policy. “Management sort of subscribed to BYOD, but they wanted to reimburse employees, which effectively took away all the benefit,” he recalls. “We realized we were compromising security and the cost benefit was really only on paper.”

Xchanging now advises its customers to use a policy known as “corporate-owned, personally enabled” (COPE), which is gaining traction the way BYOD did around this time last year.

With COPE, an employer selects and buys just a few types of mobile devices so it can get good deals. Employees still have some choice of device, and theoretically that will still boost their productivity. The company’s total cost of ownership goes down because of volume deals on voice and data services and because the devices themselves are merely a one-time cost. Then the company can go a step further and use third-party software to separate company data from personal data within the devices to help alleviate security concerns, although that adds a cost.

According to the study, the typical employee spends $80 to $90 per month for a personal smartphone voice and data plan, which most companies with BYOD policies reimburse. On the other hand, data and voice on a corporate-owned smartphone costs around $60 to $65 per month, thanks to bulk discounts, pooled data for voice, data and texting, and special rates for international reporting.

After factoring in the corporate cost associated with the reimbursement process, which Park estimated to be about $20 per employee, companies reimbursing more than $40 per month for an employee’s voice and data are “deliberately giving up money to support BYOD.” 

The study found that the standard monthly reimbursement for companies with a BYOD policy is about $75, which means they are effectively giving up hundreds of dollars per employee annually.

Another finding suggests that BYOD’s effects on employee productivity aren’t all they’re cracked up to be. In the report, Park questions the credibility of a recent annual IT report by Intel that estimated time savings of 57 minutes a day for its 23,500 BYOD mobile users. Based on his own interviews with businesses, he suspects the company may be overrating the productivity increase.

Realistically, the report asserts, it is more likely BYOD provides a one-time benefit in shortening the amount of time it takes an employee to customize and adapt to his device’s layout and workflows.

“Mobile productivity as a concept isn’t overrated,” Park tells CFO. “But companies seem to like overrating the productivity they get from a technology, and it’s a dangerous assumption to make because you start assigning value that doesn’t exist.”

When it comes to BYOD, the report asserts, the winners are the mobile carriers, as well the employees themselves, who dictate technological standards of a business without regard for its welfare.

“All companies must treat BYOD as a financial investment just like any other enterprise IT project,” he says. “But it often falls outside the scope of the traditional IT project or budget, and that’s why the majority of companies don’t really seem to understand its costs and benefits.”

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