BYOD’s Productivity Gains Are “Hard to Calculate” – Study Says
BYOD’s Productivity Gains Are “Hard to Calculate” – Study Says by UCStrategies Staff
Nucleus Research released a report, “Understanding the Hard ROI of BYOD,” which examined the difficulty of calculating BYOD’s productivity gains. The study also took a close look at the costs of financing a BYOD initiative and found that the trend offered little in return.
“The hard ROI of BYOD is a straightforward accounting exercise that is being confused by the feel-good claims around productivity and vendor proclamations that lack a financial foundation,” wrote Hyoun Park, the author of the study. Park is a principal analyst at Boston-based firm Nucleus Research.
Park pointed out that with BYOD, companies no longer need to spend on corporate smartphones and tablets for their employees. But the cost of devices only account for less than 10 percent of a company’s yearly spending on mobility. And with BYOD in place, there comes an increase of the other 90 percent of mobility spending, including data and voice, developers, help desk, and mobile management software.
An enterprise mobile phone with an average 18-month life span costs $200. This represents $11 per month. After factoring in discounts of around 20 to 30 percent for bulk buying and complimentary backup devices, companies that decide against procuring corporate mobile devices for its employees in lieu of BYOD are saving only $8 per month.
The company normally reimburses around $80 to $90 for a personal monthly smartphone plan. This amount is equivalent to 10 times the actual cost of the device. Compare it with a corporate smartphone of around $60 to $65 per month, resulting from volume discounts, “pooled data for voice and data and texting, and special rates for international reporting.” In addition, BYOD comes with a hidden charge of approximately $20, a cost associated with processing expense reporting and reimbursement.
“In general, any reimbursement about $40 per month means that the company is deliberately giving up money to support BYOD,” remarked Park. “Companies providing a standard $75 reimbursement (or more) through an expense report process are giving up hundreds of dollars per employee every year to support BYOD.”
BYOD’s productivity gains are “hard to calculate,” according to the new Nucleus Research study. Companies, of course, have attempted to calculate BYOD’s ROI. Cisco said that its BYOD saved the company $2 million per year. Meanwhile, Intel specified an annual productivity gain of around five million hours in 2012 from its BYOD program.
Intel said that it had daily savings of 57 minutes for the company’s 23,500 employees participating in BYOD. Intel makes around $500,000 per employee annually. Thus, one hour of savings per day for every employee adds around $700 million in productivity.
According to Park, the estimate is hard to believe. “However, if true, a $700 million productivity increase is material to the business and should be considered by the investment community as a key differentiator.” (KOM) Link