Money talks: BYOD budgetary considerations

By Fred Donovan (Part of the FMIT special report Making BYOD work)

While BYOD was originally viewed as a cost saver for enterprises, it has often resulted in greater expenses--particularly from the added management, support and security required.

Despite the promise of reduced hardware costs, BYOD is actually costing enterprises more money in terms of wireless infrastructure upgrades, support costs, mobile device management spending, and increased security costs.

Analysts and studies have identified the obvious costs of BYOD, as well as some of the hidden costs. For example, Gartner forecasts that supporting BYOD will cost enterprises $300 per employee annually by 2016, up from a current $100 per employee annually.

"The cost will increase alongside the costs of mobile device management and software costs," says Gartner research director Nick Ingelbrecht.

Security requires strong BYOD policy

While cost is one issue posed by BYOD, security is another. Technology is not a panacea for this issue; a strong, easily understood BYOD policy is the answer, Ingelbrecht explains. However, many enterprises have failed to develop and implement such a policy. "The issue is that the horse has bolted, and it's very hard to retrospectively impose policies once people have already started using the devices as part of their daily work lives," Ingelbrecht relates.

In addition, the structure for BYOD cost reimbursement is not well understood by many enterprises. Many do not reimburse for costs at all, while some reimburse for service costs.

"Mileage, wear and tear and fuel costs [of personal vehicle use] are all well understood by both the employer and the employee. That's not the case with BYOD," he explained.

According to a survey of 477 IT executives by Wi-Fi provider iPass and mobile device management firm MobileIron, IT departments spend $96 a month on average for data fees for each mobile worker.

"Even factoring in free Wi-Fi, the cost of the mobile broadband data subscription is quite high when you consider all of the devices. That works out to around $1,200 per employee per year," says Chris Witeck, senior director of product marketing at iPass.

A full 57 percent of respondents believe their mobile data costs will increase in the next year, with 8 percent saying the costs will rise more than 25 percent. Around 44 percent of IT managers said broader smartphone usage was a factor, 41 percent suggested 3G and 4G data usage, and 22 percent pointed to an increase in the number of mobile employees.

Despite the costs, a majority of enterprises have changed their corporate guidelines within the past year to be more accommodating of employees' personal devices, according to the survey.

"We definitely have seen a shift for more organizations to be more accommodating to personal devices... Now 81 percent of companies accommodate personal devices in the office," Witeck relates.

These stats are in line with a survey by IDC on behalf of Samsung, which found that 85 percent of enterprises permit BYOD.

"Some of the biggest difficulties IT executives are facing is how do they support these devices. Security fits into this through data encryption and data loss," Witeck says.

Improving employee productivity

BYOD is increasingly being seen as a way to improve employee satisfaction and productivity, although this is now being called into question by United States productivity statistics. U.S. productivity growth has slowed since 2004 to an average of 1.5 percent per year, well below the 3 percent yearly growth experienced between 1995 and 2004, according to U.S. government figures cited by the Wall Street Journal. Mobile devices have "done absolutely nothing" to improve productivity, Northwestern University economist Robert Gordon was quoted by the newspaper as saying.

Alexa Bona, vice president and distinguished analyst at Gartner, identifies BYOD as one of eight disruptive forces that are contributing to the "explosive rise" in IT asset costs. Bona notes that the disposal of mobile devices, whether corporate owned or personally owned, is yet another hidden cost that enterprises must consider. There are an increasing number of data security and environmental regulations constraining enterprises in how they can dispose of mobile devices.

In addition, the plethora of mobile operating systems and apps in the enterprise are adding to the complexity and cost of IT procurement. "The lack of dominance of one form factor, platform or operating system will affect negotiations with previously dominant vendors. In addition to managing a new dynamic with existing providers, IT procurement executives must be ready to deal with new vendors, such as Apple and Google, that because of their consumer orientation behave very differently from traditional providers," Bona observes. The budgetary challenges posed by BYOD for enterprises will only keep multiplying.

Much more on BYOD from FierceMobileIT:
BYOD pits IT staff against employees
Today's schoolchildren will flood BYOD ranks, study reveals
BYOD market becoming lucrative opportunity for device makers
3 questions to ask before allowing BYOD