BYOD a waste of money?

BYOD a waste of money?

Summary: Many organisations are considering support for BYOD, but they shouldn't expect to see any cost savings out of it, according to IDC and Dematic.

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The idea that bring-your-own-device (BYOD) policies can bring savings to an organisation is a misconception. BYOD can, in fact, cost more than not doing so, according to IDC mobility analyst Tim Dillon and Dematic CIO Allan Davies.

Both were panellists at RIM's Australian BlackBerry Mobile Fusion launch in Sydney.

BYOD has been a trend for some time, thanks to the consumerisation of IT and the proliferation of smartphones, as well as tablets. Increasingly, workers want to bring their own personal computing devices into their work environment.

ZDNet Australia recently asked its CIO jury participants about BYOD and what their stance was, in terms of their own company. All of them have had some form of support for the trend.

While, theoretically, BYOD can save money for companies since workers are forking out from their own pockets for devices, these cost savings have yet to be proven, according to Dillon.

"We are in early days, in terms of strong business cases for BYOD," he said. "I wouldn't say any organisations that go into it will save costs — they will not."

"Cost for those organisations is about 7 to 10 per cent above what they had before."

For one, corporations have to factor in associated costs with rolling out mobile device management (MDM) tools and securing personal devices so sensitive data will not be lost. For companies that also procure voice and data plans for employees, they also lose their economy of scale advantage when negotiating deals with telco providers.

"Anybody that is saying 'I'm going to save a lot of money on BYOD' might initially, but then they have to expect to pay for it later on, and we're seeing that around the region," Dillon said.

For the past 18 years, Davies has been the Australian CIO of Dematic, a warehouse and logistics company with operations worldwide. He has been forced to enable BYOD, due to executives' demand, not because of demand from workers. However, he cannot see any tangible benefits from BYOD.

In 2008, he rolled out a BYO-PC policy, which yielded no cost savings due to low uptake.

One of his problems with BYOD is the cost of data roaming on those devices, since Dematic issues employees work SIM cards.

"You can get great plans from carriers, but the minute that device steps outside this country, the roaming costs will kill you," Davies said. "We do have a BlackBerry fleet with [data] compression, and we get back some cost. But somebody travelling with a non-BlackBerry tablet device — we have seen huge costs."

Another issue for Davies is the headaches it can cause for IT departments, including the inability to repair broken personal devices.

"We are starting to proliferate devices that IT can't repair, support or swap out. And if you are going to swap out, you might have 900 of these things, and you want to keep a pool of them," he said. "Then you bring in that additional effort into your IT department, and I can't see where money can be saved."

Davies recognises that BYOD can bring productivity efficiencies, but that is not something his company measures or considers important.

"We can only measure tangible efficiencies," he said. "If I'm making my field service people an hour more productive per day, well, what do they do with that hour? How does that turn into extra revenue for the business?"

While there is a lot of talk that BYOD can, in fact, deliver productivity gains, Dillon is not convinced it is an integral part of that gain.

He agrees BYOD means people can work on the go, such as when on a plane, but said that it is something that can also be done with company issued devices.

"That's where I think IT has probably missed the boat," he said. "We can create a flexible mobile architecture, that enables us to do everything we have to do better than what we are doing now with a corporate architecture.

"[Organisations] can let people choose their own device [from a selection]... it doesn't have to be BYOD."

Topics: BlackBerry, CXO, Consumerization, Mobility

Spandas Lui

About Spandas Lui

Spandas forayed into tech journalism in 2009 as a fresh university graduate spurring her passion for all things tech. Based in Australia, Spandas covers enterprise and business IT.

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36 comments
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  • Unless you are a very small business (mom&pop shop) with zero liability

    BYOD is going to cost, not save you.

    The additional infrastructure needed is going to out-cost any savings on hardware (which is cheap). Then there is the huge cost of liability ... it will only take ONE bad/careless potato to cost MILLIONS in legal fees ... even if the case is nothing more that an investigation.
    wackoae
  • There's 0 other reasons to go BYOD

    "The idea that bring-your-own-device (BYOD) policies can bring savings to an organisation is a misconception. "

    There's 0 other reasons to go BYOD. If it weren't for savings, nobody in their right minds would do it.
    CobraA1
    • Some people think that it is cheaper

      ... then at the end of the year, find out that the savings on hardware were completely blown out by the cost of the infra-structure needed to support it.

      And a few found out that the cost of liability is in the millions ... while the savings were in the low thousands.
      wackoae
    • You must not be in IT

      Because if you are, you will know there is no such thing as standard when you have VIP - director, managers, C-level executive bringing in whether they prefer and at this moments, it is all Apple, iPhone, iPad, MacBook. Instead of burying your head in the sand (aka holding on to your "standard"), you might as well face the reality and have a plan ready to support all kind of devices and secure access to data. Hence the rise of BYOD, you can't stop the wave, might as well do your best to keep your head above water and ride on top of the ride.

      It is funny how this article came out during the Blackberry Fusion launch, because people (not orgnaisations) overwhelmingly prefers Apple, Android and rejecting Blackberry. This is not even a study, it is two men's opinions (wondering how much they are getting paid by RIM to speak), which didn't even sound believeable. One minutes they are saying how "We are in early days..." The very next sentence, they say organisations "will not save costs" and the followin sentence "Cost is about 7 to 10 per cent above what they had before"?!? How do one goes from saying it is too early to tell if there is saving in BYOD to there is no saving to will cost 7-10%? That's gotta be the quickest study in the history of mankind!
      SonofChef
  • Why would employees bring their own device?

    I just can't figure out what these employees intend on doing..is it so they don't need 2 phones - 1 from work and 1 for personal?

    Why would then bring in a tablet? What's wrong with their desktop or laptop?
    steveaaaaaa14
    • I have the same question

      Why do I want to spend my own money to buy something to do my employers work when my employer provides a solution for me?
      ye
      • I already have a phone

        I already own a smartphone with an ample voice and data package. Why would I want to caryy around a shitty 2nd phone just for work? I'd rather just use my own, no extra expense incurred because I'm paying for it anyway!
        fingersl
    • When your business tells you too

      Like a number of growing departments in the Great(?) State of California!

      sigh.......... and I live here :|
      rhonin
  • Speculative criticism...

    Firstly i am pro-BYOD, and am also open to any conncrete info that helps clarify the cost/benefit of BYOD. What i am underwhelmed about in this report is the lack of hard numbers about the costs being talked about. I'd like to know where the 7-10% cost increase comes from.

    Regardless of whether BYOD or a dedicated corporate device is used, the infrastructure costs would not change, (much), because you're still faced with the same MDM issues, no matter how the devices are provisioned. The point about broken personal devices is almost irrelevant. It's a peronal device that you bring everywhere, if it breaks while on the job now, the owner has no legal recourse unless the company mandates a byod policy that would set some precedent for liability.

    Finally, the cost of data plans might be subsidized by companies offering their app to staff. All in all the determining factor is the provision of the device which can be in the order of hundreds of dollars. A data plan costs about $100-$200 per year which is a fractional cost for a tablet or smartphone. The Business world already has established practices with subsiding phone expenses, it's not particularly hard to extend this to data as well.
    Giulio Campobassi
    • Cost Savings

      The only way the company is saving anything is to push the cost to the employee.
      We are in the midst of implementing BYOD as far as corp phones. For those that bring in their own we will pay a set amount which equals a portion of the data plan only. Thus the employee pays for the voice usage and the remainder of the data.
      We still have company issued phones as well so where is the cost savings?
      BTW where in the USA are you finding data plans for $100-$200 anual?
      harrim47
      • I was talking from Australian market perspective

        @harrim47 Usual data plans of 1gb per month are around $10/ month. You can get cheaper, but network quality is sub standard or allowance is not effective. Your comment about byod rollout is one example of what I'm talking about. Legal and security issues are the primary obstacles preventing uptake. But depending on the app and how it's delivered to the device, security may not be so risky. Legal frameworks are now coming about that simplify this process for business.
        Giulio Campobassi
        • Just curious...

          Who in oz is offering these plans?
          wazpark
          • Telstra offer data bundles for $10/month

            But all the major players offer something. This is just one example
            Giulio Campobassi
    • There are other things to consider

      For example with BYOD it's likely you're combining personal and business data on the same device. If a company needs to remotely wipe the device to protect business data it's likely you're going to wipe the personal data too (yes, MDM solutions are working on it). What about litigation? If the device needs to be seized as evidence what about the "other" (business or personal) data? What if it needs to be seized for business litigation? Will the company compensate you for the device? Will you be out of luck until the litigation is over and the device is now obsolete?
      ye
      • Depends on the app...

        While MDM comes upto speed on this, we are left with the capabilities of the app to wipe sensitive data without destroying personal info or not store offline data. However business apps are going into a hostile environment where the personal device could already be compromised by malware. This is where vpn's or device level security apps may also be needed. Frankly if it's that sensitive to be concerned about, issuing a locked corporate device is perhaps the best option. Depends on the level of risk in that case.
        Giulio Campobassi
    • There are other things to consider

      For example with BYOD it's likely you're combining personal and business data on the same device. If a company needs to remotely wipe the device to protect business data it's likely you're going to wipe the personal data too (yes, MDM solutions are working on it). What about litigation? If the device needs to be seized as evidence what about the "other" (business or personal) data? What if it needs to be seized for business litigation? Will the company compensate you for the device? Will you be out of luck until the litigation is over and the device is now obsolete?
      ye
  • How on earth do you secure Apple products?

    I recently broke down and got both an iPhone, and an iPad 3. I just don't see how these are corporate level, enterprise devices. They are fabulous, wonderful toys, great for email and browsing, but the suffocating iTunes experience makes them impossible to work with in a true business context.
    WAKE UP MICROSOFT!!!!
    • Apple iProducts

      Have not needed iTunes for quite some time now. As for securing use a password beyond the simple 4 digit password and use the Find My iPhone feature to find and/or remotely wipe a lost or stolen iPhone.
      athynz
    • It depends what you're securing

      Norman,

      I think it depends on what you mean by securing a device. There are plenty of apps out there (I work for ionGrid) that help secure devices. If you're looking for secured access to documents, you should check out ionGrid's Nexus App (Nexus Connect for individuals and Nexus Enterprise for businesses). We keep your content on your servers (not in the cloud) but provide access on mobile without using a VPN.

      For the rest of you I though I would bring your attention to a quick commentary on "Improving the Bottom Line with an iPad ROI".

      http://www.iongrid.com/blog/2012/01/13/improving-bottom-line-ipad-roi

      I think it presents a unique view compared to the commentary in the article.

      For those of you claiming that there are "0 benefits for BYOD", I hope you do a little bit further research. BYOD can have huge cost savings and improve productivity when IT departments select the right combination of resources to manage mobile devices (one of which is ionGrid's Nexus).
      ionGrid
    • Securing Apple IOS

      Either of these will sandbox iPad and iPhone and both are pitched to Security Level IL3:

      http://www.mycroftltd.com/mycroft_mobileia_mobile_device_security.php

      http://www1.good.com/email_landing_pages/byod2_via_landing?lsrc=3rd%20Party%20Banners/Syndication&ltyp=Whitepaper&cid=701000000005yBP&gclid=CIe8-NCakrICFUdvfAod4ywAIQ
      John Laity